Tag Archives: Dow

Mann Overboard

ECONOMY UPDATE

JULY 26, 2024 – Just to be transparent, I cashed in most of my holdings today. When the Dow is up 700 points it is a good day to sell:) We continue to see the Dow perform way better than the NASDAQ. My expectation of one more new high move by the Dow not being confirmed by the NASDAQ looks better and better.

JULY 25, 2024 – 2nd Quarter GDP came out above expectations at +2.8%. We have now completed 2 full years of strong economic growth. Something that 99% of the economists and pundits said would not occur.
I do some of my best thinking in my dreams. I have long thought of them as an alternate reality and am amazed at some of the things they come up with. As I dreamed about the economy, an analogy came to mind. A traffic stoplight.
For the past 2 years, the economy has been on solid Green. Economists and pundits kept calling for Yellow or full Red. We never had a chance of such and never came close.
However, for the first time in over 2 years, I am switching my signal from solid Green to that hard to see split second when Green starts to turn to Yellow. As I have mentioned many times, the stock market (Dow 30 for my analysis) is forecasting the economy 6 months into the future. Right now, that is the end of February 2025. Basically, next Spring.
The NASDAQ 100 has a good chance of having topped on July 10th. Thus, it would be in the first stages of a Bear Market. My analysis is calling for the Dow to make one more move to new highs peaking as low as 42,000. 43,000 still remains possible. The NASDAQ 100 would also rally. But, not to new highs. If the Dow does put in a final top over the next month, then it would be saying the economy will peak by the 1st Quarter of 2025 and start a downturn after that. I forget how long ago it was that I mentioned a long lead time indicator was suggesting a recession in 2025. Also, the first year of a Presidential cycle often sees a recession.
In summary, it looks like the economy’s Green light is just starting to change to Yellow. Using another analogy, the stock market appears to be the first car on a rollercoaster that has passed the top and started downward.
I will say that my 50+ years of experience says that stock market tops are tough to call as they stretch out over a period of time. Stock market bottoms are usually easy to see as they take a ‘V-formation.’ Interestingly, commodities do just the opposite.
Lastly, ALL sentiment indicators say almost all stock markets (NASDAQ, S&P 500, Dow, Russell, etc) are around a top.
We shall see how the next month or so plays out. There is a small chance the Dow has already topped, too. I will be watching closely.
Shalom,
The Mann

Mann Overboard

MID-YEAR UPDATE

JULY 3, 2024 – I forgot two items in post below. The next wave up should take gold to $2500-$2600 ounce and the next wave up should take Bitcoin well above $100,000. And most importantly, Happy 248th Birthday to the USA!

JULY 1, 2024 – As you get older, the years fly by quicker and quicker:) Here’s an update on a few items.
STOCK MARKET – The Dow has now put in two lows in the 37,500-39,000 that I had forecast for being a bottom. I think it will put in a third low around 38,500 before the Summer is over. Then we should see a strong rally to the final Bull Market top of 43,000+.
BONDS – Treasury Bonds are at a critical junction. I don’t like those because what it says is we may go up or we may go down. Anyone can say that lol. I am sticking with the bullish case and expect a turn up at any moment literally with interest rates declining for several months. Even if the weakness occurs, it just delays the up move in prices and thus downturn in interest rates.
UNEMPLOYMENT RATE – Simply put, I expect it to be 4.4%-4.5% by yearend.
RECESSION – Today is the 2nd anniversary of a very strong economic expansion. As I noted all along, it was missed by the vast majority of economists and pundits. Also remember, until the 2030’s when we see +100% annual GDP, we will not see annual rates of 3%+ anymore. Annual growth over 1% is good and over 2% is exceptional and cannot be sustained for long. As with interest rates, people need to adjust to the new normal. Is a recession finally the horizon. Yes, finally! I mentioned last year that a longer-term indicator was suggesting a recession might occur in 2025. First years of a presidential cycle are usually the weakest. Also, if the stock market does top out this Fall and turns down significantly, then it will be signally for a recession at the end of Spring into the Summer of 2025. As I mentioned awhile back, when the economists and pundits give up on a recession, then we know one is right around the corner:) Numerous articles like the following have come out this year:
https://www.reuters.com/markets/us/yield-curve-disinversion-is-recession-signal-watch-2024-06-04/
Although some argue this indicator has not been wrong since World War II, it was wrong in 1966. What is significant about that? That was the year the Dow first broke 1,000 and was at all-time highs. Similar to today.
In the above article and others, people start grasping at straws and say well maybe it isn’t wrong, yet. In the past recessions have started 13-22 months or whatever after the inversion occurs (fyi it was July 2022 when it occurred this time around). We are now passing 24 months and with a near zero chance of a recession occurring this year, we will be at 30+ months. Time to just admit this, and another dozen indicators I have mentioned in past blogs, indicator is simply wrong. Come on, admit it:)
Enjoy your Summer and an interesting Fall. Only 126 days til the 2024 Presidential Election. But, sadly, only 1,587 days til the 2028 Presidential Election and we know the campaigning begins after the 2024 election is settled (which no longer is the day or night of the election itself).
Shalom,
The Mann

Mann Overboard

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?
Mann Overboard

STOCK MARKET AND INTEREST RATES

MAY 5, 2024 – It’s been awhile since I posted about stocks and bonds. It takes time for the waves to play out. Back on January 8th I posted the following:
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.
===================================
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 has been underway for 5 weeks and we are right in the 37,000 to 38,500 range.
As I have noted in the past, as the waves unfold I can update the targets. I would say the low end of the range needs to be lowered to 36,000. I do not think the low for this correction is in place, yet.
INTEREST RATES – There is a good chance the bond decline finally ended on April 25th. This was a 4-month decline. From here bonds should rally at least through the Summer and interest rates should decline at least 100bp.
I will post a stock update when I believe this correction has ended.
Shalom,
The Mann
Mann Overboard

INFLATION AND ECONOMY UPDATES

FEBRUARY 12, 2024 – The January report came in at 3.1%, just below my forecast of 3.2%-3.3%. and above the consensus estimate of 2.9%.
The 3-month annualized inflation rate is 1.0%. The 6-month annualized inflation rate is 1.8%. These figures are lower than the annualized rate (3.1%) and thus indicate the annual CPI should drift lower.
The data is predicting a reading between 2.6% and 2.7% next month. Like last month, I think this will be way off. Inflation is historically high in January and February. I am going to forecast 3.0%-3.1% for next month’s figure.
ECONOMY – We have had 6 straight quarters of above 2% GDP growth since the recession in the first half of 2022 ended. The last two quarters have been above 3% (!) and some forecasts expect another 3%+ figure for the First Quarter of 2024. With annual population growth around 0.7%, any GDP growth above that amount is exceptional. The chance of a recession occurring this year remains slim to nil. It certainly won’t occur in the first half of this year.
STOCKS – The Dow 30 continues its march towards 40,000. I never did see anyone else predict 40,000 this year. I suspect there are a few others like me out there somewhere. As they saay, never count your chickens before they hatch. 38k+ is not 40k. But, the stock market is saying the economy this Summer should be extremely strong.
The recession mongers couldn’t have been more wrong for the past 20 months. They will continue to be wrong into the foreseeable future.
Shalom,
The Mann
Mann Overboard

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

Mann Overboard

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

Mann Overboard

BEAR MARKET ACTUALLY AVERTED…BARELY

NOVEMBER 25, 2023 – The markets instantly reversed a month ago. Just like they did last October when the Bear Market bottomed.
STOCK MARKET – Although the S&P 500 and NASDAQ went into a Bear Market, the Dow 30 avoided such. Since the October bottom, the Dow is up 9.5% and over 3,000 points. The NASDAQ is up over 15% and the S&P 500 over 11%. NASDAQ is at a new Bull Market high. The Dow and S&P 500 are within 1% of new Bull Market highs.
REGIONAL BANKS – The regional bank index ETF (KRE) is up 18% in the past month. But, still 11% below its Summer peak.
HOUSING – The housing ETF (XHB) is up 19% over the past month and within 3% of its Bull Market high.
Market action since August suggests we will have some economic trouble in the first quarter of 2024 followed by a continuation of the economic expansion that started in the Summer of 2022. 4th Quarter GDP is forecast to be just under +2%.
INTEREST RATES – Bonds also appeared to have bottomed on October 23rd. A strong rally appears ready to have a minor correction. Interest rates should continue to decline for the next 3 to 6 months. The decline will be significant.
Shalom,
The Mann

Mann Overboard

STOCK MARKET and BABY BOOMERS

AUGUST 18, 2023 – The stock market fell through a critical level this week. Thus, I wanted to get my thoughts out there as to what appears to be happening and what we need to keep an eye on. As I continually complain about, you cannot be a broken record and hope you are right eventually. The market clearly tells us in advance what is going to happen.
The Dow 30 peaked on August 1st. It is down just about 4% as of today’s low. That is a minor decline. But, in the Elliott Wave Theory the decline crossed a level that should not have been broken. As such, we have to be alert to a trend change.
What the market has told us so far is that the economy will be fine into the 1st Quarter of 2024. There is basically zero chance of a recession occurring in the last two quarters of 2023. In fact, it is telling us that the news will be great this Winter. That said, if August 1 becomes a significant top, then the market is telling us that a chance of a recession by next Fall may occur. It will be October 2024 before we could have confirmation of two consecutive quarters of negative GDP. That assumes the 1st Quarter 2024 GDP will be positive.
It is just difficult to believe that right before the Presidential Election we will have confirmation of a recession. The incumbent administration does all it can to avoid such from occurring. That is why the first year of a new president is when a recession usually occurs.
The Regional Bank Index has had its largest decline since the bottom in May. It is down 11% from its recent high. The Homebuilders Index is down 6.5% from its recent high. The NASDAQ is down 8% from its recent highs. But, the NASDAQ’s waves are in better shape than the DOW 30. We will see if the indices align or keep diverging.
Treasury Bonds are about to break to new lows. Thus, interest rates are hitting new highs. The 30-year mortgage rate is above 7% again. It has been awhile since I called the top last year to the exact day. These are the highest rates in 21 years.
Ten-year treasuries are at 4.25%. The waves are projecting a move to 4.54%. The current rate is the highest in 12 years.
If the waves play out as expected, rates should go up about another 1/4% and then decline to the 2.5% to 3.3% range over the next year or such. The incumbent administration would certainly like that to happen during an election year! This scenario matches up with the market’s expectation that the Fed Funds Rate will be lowered 2 or 3 times in 2024.
My feeling is rates are finally back to market levels. We have had government-controlled, artificially low interest rates for most of the past 8 or so years. We are finally at a level where rates reflect the risk of underlying assets like bonds and real estate.
The market is at a critical stage. How it plays out will tell us what will happen in the Spring.
In regard to us Baby Boomers, I came across the following stats from Quill Intelligence. About 10,000 Baby Boomers turn 65 every day; seven in ten will need long-term care in their lifetime. The number of Americans over the age of 85 is expected to more than double from 2019 to 2040, from 6.6 million to 14.4 million. An estimated 711,700 caregiver jobs will open up every year from 2021 to 2031.
The good news is us Baby Boomers will remain in charge of the power positions and almost all of the world’s wealth for another 10-20 years. The generation before us earned the title The Greatest Generation. But, the Baby Boomer generation provided the peak for the world that hasn’t been seen since The Roman Empire. Things will decline generation after generation for hundreds of years to come. I do think we have just begun The Dark Ages II.
I guess I should end this cheerful post here.
Shalom,
The Mann

Mann Overboard

AN EVERYTHING UPDATE :)

UPDATE – MARCH 23, 2023 – A few items to update regarding the post below and other recent posts. I had heard that 1/3 of bank deposits are uninsured. I just saw a chart from the FDIC that says about 1/2, or about $9 Trillion (!), in deposits are uninsured. No banking system could withstand even 20% of that amount being withdrawn. Money continues to leave banks as consumers can get 4%+ in money market funds and T-Bills versus 0.5% in banks. With the inverted yield curve, banks are unable to pay 4%-5% on deposits in line with the Fed Fund Rates.

Here is a list of banks with the most unrealized losses in relation to their total equity capital. Remember, the Fed is letting banks get funding on their underwater bonds at full par value. So, this doesn’t necessarily mean a run on deposits at these banks will make them go under. But, they are on thin ice. Customers Bancorp, Inc., First Republic Bank (been in the news for a week), Sany Spring Bancorp, Inc., New York Community Bancorp, Inc., First Foundation, Inc., Ally Financial, Inc. (by far the worst ratio….and like CACC, in the auto loan business), Dime Community Bancshares Inc., Pacific Premier Bancorp Inc., Prosperity Bancshares Inc., and Columbia Financial, Inc. The late-SVB was in this group, too.

The more I understand what the Fed has done, it appears this is what I would call IQE1 – Indirect Quantitative Easing 1. Leave it to us Baby Boomers and our invention of creative financing to now come up with an Indirect QE:) Gotta love us:) In the end, it will probably be referred to as QE4. See my next post as to a term you will want to watch for to know when the Fed has gone all in on the real QE4.

As an aside, the Regional Bank ETF hit a new low by a few pennies today. The market is still sorting out which banks to sell and which to buy.

Also, I mention in the original post below that the market is telling the Fed to lower rates 150bps in 2024. I heard today that has been moved up and the market wants the Fed to pivot in 3-4 months and start lowering rates. No pressure on Powell, eh!

MARCH 21, 2023 – As the 1st Quarter comes to an end, this seems like a good time to update my thoughts on forecasts on many items. So, here goes. No particular order.
BANKS – As this has been the hot topic for the last 10 days. It seems like everyone is predicting hundreds of bank failures to come. The Texas Ratio shows 200 banks at risk. Folks we have entered QE4. I think the last QE was QE3. Correct me if I am wrong. If Vegas gave me good odds, I would bet no more American banks would fail this year. Yes, you heard me right. As there might be some small banks that are in marginal shape, I am thinking a better bet is less than 5 or so banks will fail. I am thinking total assets of banks that might fail will be under $50 Billion. Maybe much lower. There are 10 banks with relatively high CRE ratios. But, their reserves are likely high enough to handle upcoming CRE losses. And the Fed thru QE4 already shored up the weakness in their Balance Sheets. I learned from QE1 thru QE3 that the Fed isn’t going to allow our markets to suffer for too long. As the saying goes, buy when there is blood in the streets. That occurred on Monday March 13th. The S&P Regional Bank ETF I mentioned bottomed that day at 41.92. It has been higher since and closed today at 46.07. Up 10%. No, you wouldn’t have bought at the bottom tick. But, you probably would have bought very close to it as it was such an obvious moment in time. I have been wrong before. But, I can see that panic bottom not being violated and the ETF continuing higher this year. The entire world is anti-regional banks. That is when you should be pro-regional banks.
INFLATION – Geez this will get extremely long if I write as much as I did about banks:) I still see a July 12th annual reading of 3% or lower. 2% is still likely. I will throw out something you likely have not heard from anyone. There is a slim chance of a NEGATIVE inflation (aka deflation) reading at yearend or, more likely, in 2024. That isn’t a prediction I would lay too much money on. But, if you gave me the same odds that FDU had of beating Purdue in The Big Dance, I would put some money down.

FED FUNDS RATE – Everyone is asking this week what will the Fed do at the upcoming meeting. It is truly a 50/50 chance they will not make a change or raise the rate 25bp. In the end, there is minimal difference. The difference is more psychological. My guess is they make no change and defer such to April. The market was telling them they had 50bp more to go. Now it is 25bp. Let’s wait a month and see what the market says after things have calmed down. A surprising item I saw was the market is telling the Fed to DROP rates 150bp in 2024. Although the market forecast last year’s rate increases early in the year, I think it is a bit early to put much weight into the 2024 message. Also, remember, the average time between the first rate decrease and the last rate increase is 4.5 months. Since, we will likely have the last increase in March-May, it would be difficult to have a decrease by yearend. Again, give me FDU odds, and I would take a chance on a decrease in November or December.

THE BIG SHORT 2 – As I posted last August, this cycle’s ‘big short’ was auto loans. As of Yearend 2022, $20 Billion of Generation Z and Millennials auto loans are over 90 days past due. They need to watch a classic cult movie of the early 1980’s – Repo Man. They can probably stream it:) Digressing, my uncle was a repo man. I went out one night in Fort Lauderdale with him getting cars. Scariest night of my life. Back to now….Also, for 20% of Generation Z, over 20% of their after-tax income goes to a car payment!!!! Insanity. Of course, I am sure it is like their college loans and a gun was put to their head and they were forced to take on this debt;) SCOTUS will be listening to a case in 2024 about Biden wanting to forgive auto loan debt. Have some ethics. Have some morals. Pay your debt even if it takes the rest of your life!!! The one stock I mentioned was Credit Acceptance Corporation (CACC). Its all-time high was 703.27. Its bottom to date was at the beginning of year at 358.00. That is a 49% decline. At today’s close of 415, it is down 41%. That is far in excess of the DOW being down 12% from its all-time high. Not a bad call for those who actually played The Big Short 2.

BITCOIN – There is a current setup that is similar to two times in the past that took Bitcoin up over 60x and then over 20x. As assets soar in price, it becomes more difficult to have the same huge percentage increases. So, if this setup plays out, then maybe a 5x-10x move over the next 1-3 years is possible. From the recent major low around $16,000, that would be $80,000-$160,000. This will take some time to play out.

STOCKS & BONDS – It seems like everyone is looking for a recession this year. Everyone is expecting the stock market to fall apart. As I have posted on here many times, 2022 was the recession. In 2022, the global loss for stocks and bonds was about $36.5 Trillion (!!!). In comparison, the maximum loss in 2008 was about $23.5 Trillion and in 2020 was about $24.0 Trillion. What more do people want? A CRASH 50% larger than what occurred in 2008 isn’t enough? Since I seem to be in the mood to put out crazy forecasts, let’s not stop here. By yearend, I can see the DOW above 38,000 and the S&P 500 in the 4800-4900 range. 40k in ’24 has a nice ring to it. I would be interested if you see anyone else forecasting the DOW above 38k or S&P 500 above 4800. Those who know me know I have been a bear my entire life. I have always lived for downturns. For me to be this bullish, is beyond amazing to even me. A question I always want to ask analysts is what would it take for you to say your forecast is wrong. In this case, that would be the DOW breaking below last October’s lows at 28,660. If that occurs, the above is out the door.

OIL – I honestly haven’t looked at a chart since I sold all my oil and gas (aka pro-plant stocks) holdings the day oil hit $137 per barrel. This was about a week into the Russia/Ukraine dustup. The opposite of buy when there is blood in the streets is sell when everyone wants to buy something. That was the day of the high and oil has recently traded as low as $70. Almost a 50% decline. Do you remember a year ago when everyone said we were in for a major shortage of oil and prices would go even higher? What are those people saying now? This is the first time in my life I have not owned oil and gas stocks. It is getting tempting after a 50% decline. I may check into the charts and see what is up. If I do, I will post my thoughts here. In the interim, please boycott EVs and buy only gas vehicles and devices and help the plants around the world flourish and feed its 8 billion people. I always tell people that whether it is bonds or corn or cattle or oil it is us futures traders that dictate what the price is and what consumers will pay. It is not supply and demand. It is not government actions. Commodity traders are the ones in control.

HOUSING – I am exhausted writing the above. I will cover housing in the near future. There are mixed signals. But, in general, I am feeling my expectation of unexpected market strength is playing out perfectly. NAR’s price index just declined on a year-over-year basis for the first time since 2012. However, AEI’s HPA saw a recent monthly increase. Also, Pending Home Sales are up 9.3% in the two months thru January. That is the dead of winter and home sales are up almost double digits. Remember, a year ago, the housing market was super strong. So, this isn’t working off of low numbers. Looking at a chart since 2001, when Pending Home Sales turn up they don’t usually turn back down. My prediction re mortgage rates has come very close to occurring. We have not been below 6% yet. This decline is getting long in the tooth and I am watching the charts to see when the bottom is in place and we turn back up. Although the rates have been down ever since I predicted such, it is looking like a move below 6% might not happen. Still a chance though.

You’re tired. I am tired. I hope you find the above of interest. Even eye-opening. Forecasts obviously do not come true 100% of the time. Keep that in mind. I certainly do:) I am disappointed with even a single incorrect forecast. I give it my best to be right as much as possible and to admit when I am wrong. I rarely see the pundits come out and say I was dead wrong. They should be forced to do such.

Always glad to hear from you. Please email me with any thoughts you have. Any charts or data you see that I might be interested in. I am at GeorgeRMann@Aol.Com.

Shalom,

The Mann