MAY 15, 2024 – I haven’t been paying attention to my March 22nd forecast for a Bull Market in Wheat. On that date the December 2024 futures was about $6 after bottoming a few weeks earlier at $5.65. The futures closed today at $7.11 after peaking at $7.29 a few days ago. If I were trading the futures, I would be ecstatic and would probably grab some profit.
But, just forecasting here and the forecast was for a significant increase in price over the next 12 months….now 10 months.
I expect Wheat prices to increase significantly over the next 12 months. I will revisit this at yearend to see how things turn out.
As an aside, no need to rush out and store up on bread:)
Shalom,
The Mann
Tag Archives: Bull Market
STOCK MARKET AND INTEREST RATES
MAY 15, 2024 – It has only been ten days since I posted an update about stocks and bonds. But, when things change, you need to note it. It looks like the recent correction ended in my target range and the final leg of this Bull Market is underway. We are dealing with TARGET 1 from my January 8th post which stated the following:
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
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In late March, the DOW peaked at about 40,300. Since then, a data correction has been made and the top is listed at just under 40,000. I haven’t seen that happen before. Regardless, the top was close enough to the Target 1 projection of 40,522. The subsequent correction was a short 5 weeks (ended April 17th) and bottomed in the 37,000 to 38,500 range at precisely 37,612.
As noted in the January 8th forecast above, the final target range is in the 43,000 to 45,500 range. It is crazy to be precise (albeit the past 5 months have been spot on), but I really am liking 44,000 to 44,300 for a final top. As this final leg plays out, a more precise target can be made.
Remember, a Bull Market climbs a wall of worries. And for 18+ months it has fed on the world predicting a recession. Regardless of where we go from here, ALL of those economists and pundits have been 100% wrong. The case is closed on them.
INTEREST RATES – As noted ten days ago, it appears the bond decline ended on April 25th. Bonds have rallied strongly since then. Albeit, the first wave of the 5-wave move has probably ended and a small decline should start immediately. A much larger rally lies ahead – which means interest rates will resume their decline at that time.
I will post updates as the stock and bond rallies unfold.
Shalom,
The Mann
P.S. If I told you that sometime in the 2030’s we may have +100% annual GDP growth, what would you say?
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
===================================
In late March, the DOW peaked at about 40,300. Since then, a data correction has been made and the top is listed at just under 40,000. I haven’t seen that happen before. Regardless, the top was close enough to the Target 1 projection of 40,522. The subsequent correction was a short 5 weeks (ended April 17th) and bottomed in the 37,000 to 38,500 range at precisely 37,612.
As noted in the January 8th forecast above, the final target range is in the 43,000 to 45,500 range. It is crazy to be precise (albeit the past 5 months have been spot on), but I really am liking 44,000 to 44,300 for a final top. As this final leg plays out, a more precise target can be made.
Remember, a Bull Market climbs a wall of worries. And for 18+ months it has fed on the world predicting a recession. Regardless of where we go from here, ALL of those economists and pundits have been 100% wrong. The case is closed on them.
INTEREST RATES – As noted ten days ago, it appears the bond decline ended on April 25th. Bonds have rallied strongly since then. Albeit, the first wave of the 5-wave move has probably ended and a small decline should start immediately. A much larger rally lies ahead – which means interest rates will resume their decline at that time.
I will post updates as the stock and bond rallies unfold.
Shalom,
The Mann
P.S. If I told you that sometime in the 2030’s we may have +100% annual GDP growth, what would you say?
DOW 2024 FORECAST
JANUARY 8, 2024 – Precisely forecasting the stock market is obviously futile. That said, I am posting this forecast so I can keep track of it and how it plays out. There are two target options so I will simply label them 1 and 2. They are both bullish so I am not saying the market may go up, but it may go down:) Just saying that there are a few ways it can play out statistically. So here goes the impossible….
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
TARGET 2 – The current rally peaks out around 41,906. This is followed by a decline to the 38,392-39,734 range. Then a final rally to the 44,256-47,819 range with possible targets within the range being 44,256 and 45,598.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
Please let me know if you have seen anyone forecast the Dow going to these levels this year. There is a chance the top may not occur til early 2025. I am not interested in timing re the above forecasts. Only prices.
What would make me have to totally reconsider everything? A Dow close below 34,590 would likely erase any chances of the above occurring. So, as a gambler, you are looking at a bet with a potential upside of 5,000-9,000 points and downside of about 3,000 points. A decent bet to take.
I got lucky back in early 2018 when I forecast the Dow would have a small correction, followed by a move to new highs, followed by a larger correction below the last low, then back to even a higher new high, followed by the largest correction to lows below 22,000 – this occurred in the lockdown in 2020 with a low around 18,000 which at the time I forecast within 100 points. One of my better longer-term forecasts ever.
Right now, I am 15+ months into this Bull Market forecast and I suspect it has at least 6 more months to play out if not 9-15 more months. Or I will be wrong this time around:)
As I usually say, we shall see.
Shalom,
The Mann
R.I.P. RECESSION PREDICTORS – YOU WERE DEAD WRONG!
DECEMBER 15, 2023 – First off, happy birthday to my dear wife.
Back in April and June, I mentioned that the wave theory I follow showed a strong rally ahead. It would require us breaking through the all-time highs by a wide margin. This week the Dow 30 achieved new highs and is above 37,000 for the first time ever. 40k and possibly 44k in 2024 are on the table. They have been for over 6 months.
With the information below it is time to 100% emphatically declare anyone that has forecast a recession for the past 18 months and into 2024 dead wrong. Their analysis is totally in error. Just fess up and admit with hat in hand you have no clue what you were talking about. You will feel better:) On to where the data stands and what it is telling us.
BANKS – To date, we have had two bank closures that I am aware of. One was strange as it was not FDIC-insured. We will be ending the year much closer to my forecast of 0-10 closures than the 176-200 closures forecast by many people. I think we will be able to say the same next December.
As for CRE loan defaults, I have dealt with about 5 bad loans. There has been no consistency as to why the loans went south. I am seeing nothing that indicates a lot of foreclosures nor anything specific to a property type.
Amazingly, the Regional Bank Index (KRE) is up 58% from its yearly low and is back above where it was before the SVB/SBNY closings. Remember, buy when there is blood in the streets. It worked again.
To reiterate, the market is saying that it does not believe there will be a CRE loan debacle for banks. Either not many CRE loans will default and/or banks are well prepared and capitalized to handle the defaults.
HOUSING – Home prices have been up all year and the rate of appreciation is increasing. It isn’t much. That is a good sign as it can be sustained into 2024.
The Homebuilders Stock Index was up over 5% one day this week and is now up an incredible 62% (!)from last year’s lows. On top of that, this is an all-time high.
Those who forecast a crash in the housing market continue to be way off the mark. As I said all along, 7% interest rates are nothing to worry about.
INTEREST RATES – Bonds bottomed on October 23rd. A strong rally has dropped rates by about 100bp already. A minor correction should start soon. Then after the new year, we will continue the decline in interest rates. The target is about 25-125bp lower than we are today.
INFLATION – The December report came in at 3.1%, well below my forecast of 3.6%. The 3-month annualized inflation rate is 0.0%. The 6-month annualized inflation rate is 1.9%. These figures are lower than the annualized rate (3.1%) and thus indicate the annual CPI should drift lower. However, continue reading.
Based on the data, my prediction for next month’s figure is 3.5%-3.6%. The January report should show annual CPI for 2023 to be around 3.5%. Then from the February report on into the Summer, the CPI should crumble towards 2%.
SUMMARY – With the Dow 30, bank, and housing stocks at their highs, the markets are saying all should be well through the first half of 2024. The economy is supposed to be looking good in an Election Year. That looks to be the case again.
I will reprint this statement from a post a few months ago: I put this hidden little sentence out there to refer back to in 12-18 months – The chance of a recession occurring looks to be 4th Quarter 2024 into 2025. The first year of the president cycle often sees an economic downturn. I suspect that a year from now the broken-clock recession mongers will have given up and admitted the economy is strong, et al. Just in time to be wrong again:)
Happy Hannukah, Merry Christmas, and Happy New Year!
Shalom,
The Mann
BULL MARKET, INTEREST RATES, & MORE
DECEMBER 2, 2022 – The DJIA bottomed at 28,661 in October. Yesterday, it surpassed 34,393, which is a 20% rise and what the market defines as being a Bull Market. I didn’t see that mentioned anywhere in the media. Strange.
I read that the average time between when the Fed stops raising rates and lowers them for the first time is 4.5 months. It appears that the stock market is telegraphing such.
Bottomline, the market is saying things will be bad through the 1st Quarter of 2023 and then improve from there.
The 30-Year Fixed Mortgage Rate declined to 6.49% this week. This is down from the top I called when rates were 7.22%. And, we are already over halfway to my forecast of rates going below 6%.
As for the US Dollar, it has declined from the top of 114.778 in late September to 104.533 at today’s close. That is a hefty 8.9% decline.
The forecasts are going well. As everything ebbs and flows, I would expect there to be some movement against my forecasts before the trends resume.
One last tidbit of information that I found simply incredible. The American Enterprise Institute reported that ‘for every [25- to 54-year old] guy who is out of work and looking for a job, there are four guys who are neither working nor looking for work.’ That is insane. For those who try to say it is unfair to generalize that the younger generations do not want to work, the facts say you are wrong. The labor force participation rate is down to 62.3%, which is well below pre-pandemic levels. I wonder how the economy holds up when that rate goes below 50%?
My inflation forecast is 7.5% to 7.8%. The Fed is estimating 7.49%. I am not expecting this report to be shocking in any way. We will find out on December 13th.
Happy Holidays to all!
Shalom,
The Mann