2024 Predictions

Heather Cullen

Heather Cullen

Author
In The Money

Heather Cullen Blog 2024 Predictions

Predictions for 2024

As the year draws to a close, the financial websites are full of predictions for the next year. Every man and his dog is being interviewed and asked where the market is going to be at the end of 2024. Of course, no-one knows, but that isn’t holding anyone back from giving their opinion! 

It is always good to view these predictions with a degree of healthy scepticism. Let me help by ignoring the predictions for 2024 and reviewing the predictions for 2022 and 2023 instead.

Heather Cullen Blog Predictions 2022

2022 Forecasts.

At the start of 2022, most were optimistic, no doubt buoyed by the post-covid bull that had been going for 18 months. No one saw the bear market ahead – to be fair, Morgan Stanley forecast a 6% drop, but that is not even a correction, far less a bear market which needs a 20% drop..

No one forecast how low the market would sink.

Heather Cullen Blog Predictions 2023

2023 Forecasts

At the start of 2023, everyone was a bit shell-shocked after the 2022 bear they didn’t see coming, so put on their pessimistic hats and forecast very small gains for the year. Wrong.  Yes, I know we aren’t at the end of the year yet, and anything could happen, but lets assume things are going to go on as usual for the next 2 weeks. 

Do you think any of them had any idea and were even vaguely accurate? No? Me neither!

It looks as though they were influenced too much by what had happened in the previous year.

Heather Cullen Blog Warren Buffett

2024 Forecasts

I am not going to even repeat any of them here. You can see from their track record that the ‘experts’ are pretty bad at forecasting, so lets not take any notice of them They will be just as wrong this year.

All we can do is watch what the market is telling us as it goes along, rather than hoping it will conform to our predictions.

Heather Cullen Blog Baruch Quote

To the markets . .

It has really been a week of consolidation, which I think is a good sign. The market has shown no desire to drop, and although it hasn’t risen the consolidation of prices is to be expected. Hopefully it presages another move up.

Triple Witching

If you are still holding December 2023 options (you should already have rolled them) but if you haven’t be aware that this coming Friday, 15th December, is the last triple witching of the year.

Heather Cullen Blog Triple Witching

SPY Chart

After breaking through resistance last Friday, SPY has been bouncing around in quite a tight channel just below the resistance line. This Friday it broke through again, which is an encouraging sign. We are now approximately 7% above the 200 SMA which means that unless something drastic happens in the next 2 weeks we will not have to do anything to our positions.

SPYG Chart

Heather Cullen Blog SPYG Chart

SPYG has also just popped over resistance after 3 weeks of consolidation, so that’s a good sign. See comments for SPY.

QQQ Chart

The QQQ Chart has also been consolidating for 3 weeks, also at the resistance level. But is has been trading mainly above the line so it is now acting more as a support line. The pattern it has made – where it breaks through resistance then comes back to test it is sometimes called the tea-cup pattern, and is considered a bullish continuation pattern.  It is quite normal behavior for stocks.

QQQ Chart

The VIX continues to go down and is now at its lowest level since the covid bear.

ITMeter

Heather Cullen Blog ITMeter

The week ahead . .

As we saw last week, apart from a notable exception in 2018, December is usually a quiet month. My guess would be that we are going to go up, but modestly, and I’m fine with that. With everything else that is going on at this time of the year the last thing we need is any drama from the stock market!

Heather Cullen Blog Futures

There is still around 10 hours to market open and the futures look pretty neutral. But, as always, things bounce around a fair bit on Monday as we get closer to open.

Fingers crossed for a good week!

Heather

Questions and Comments

As always, I welcome questions and feedback – just be kind!

16 thoughts on “2024 Predictions”

  1. Hi Heather,
    For a different perspective on TQQQ, you should check out Jason Kelly at:
    https://jasonkelly.com. I have no affiliation other than I read his newsletter (he is a very interesting read). He actually has millions invested in TQQQ on a long-term basis. He has argued that it can be a long term investment. I’m not asking you to believe but his attitude and positions in it are interesting. He’s held them for years (as well as MVV, another leveraged ETF). He loves volatility. Thor

    1. HI Thor
      thanks for the info, have just had a look at his website – basically, he doesn’t say what he is doing, just giving a graph of unverified results. He advertises a ‘complete investment management system’ including:
      The 3Sig Calculator.
      A thing of beauty! You’ll use it to generate your own personal signals every quarter including exact share amounts to buy and sell based on your account balances. It emails you the results to make later quarters easy by keeping last quarter’s numbers at your fingertips. Some subscribers say this tool alone justifies their subscription price.

      But this doesn’t exactly enlighten me, no info on what ‘your own personal signals’ are based on.
      Some digging produced this:
      Basically value averaging TQQQ
      Summarized: 60/40 TQQQ/cash looking for 9% quarterly growth in TQQQ.

      Every quarter you either sell the surplus over 9% or buy the shortfall under 9%, translating into mechanically buying low and selling high. Also rebalance back to 60/40 on quarters where the cash proportion becomes too high, ensuring you stay invested at least 60% in TQQQ.

      In rare deep downturns you may run out of cash (reaching 100% TQQQ), here it’s advised to deposit if possible to still be able to purchase the next potential losing quarter to keep reducing our cost-basis, otherwise wait it out basically becoming a temporary buy-and-hold TQQQ investor on the way back up.

      PS: I believe he’s actually using bonds (AGG) instead of cash for the plan, but the idea is for something stable which can reliably purchase TQQQ when needed.
      I am not sure if this is accurate, his website doesn’t give enough information to verify, but it sounds like dollar cost averaging.
      I’ve read the first 30 pages of his book, and it is all basic stuff (what is P/E? What is EPS? etc) which doesn’t give us any idea what his strategy is.
      I see that he had good reviews, so maybe I am missing something?
      h

  2. Hello Heather. I am interested and looking forward to trading and becoming a woman in finance in the stock market. If you would please forward the platforms, (ie. fidelity, cschwab) recommendations in starting an account. I plan on purchasing your book for myself as a Christmas gift this year. Thank you and I look forward to hearing from you soon.
    Sincerely, Mary Lee

    1. HI mary Lee
      I don’t recommend any prticular broker as I am careful to keep my independence, but I am quite happy to share what I use. I have accounts (too many! I need to rationalise) at lots of brokers, but the main ones I use are firstrade, Saxo and Schwab. I find that the Schwab platforms are the best for my requirements, their SSE (Street Smart Edge) and SSC (Street Smart Central) are powerful, if a bit hard to navigate.
      However, I have one major beef with them – their customer service is appalling. For example, I transferred $10K from one of my accounts to another bank a few weeks ago – goodness knows where it went, the receiving bank didn’t receive it, Schwab was ‘looking into it’, and more than 6 weeks later I get this:
      Dear Ms. Cullen,

      Thank you for your message.

      Regrettably, the funds are not able to be recovered. Please call and speak with our Wire Research team at 855-490-0286 x572647 or by using the toll-free phone number for clients in Australia at 1-800-781423. That department is available Monday through Friday from 8:30 am to 7:00 pm ET.

      Please contact us if you have any further questions or concerns. We appreciate your business.

      So its gone, and they are not going to refund it. Terrible customer service.
      Apart from that they are quite good, and I recommend that if you are setting up an account with them make sure that you only use the demo account (not real money) until after you have read my book.
      Hope this helps
      h

  3. Hello Heather, this website is a great complement to your books and I really enjoy reading your thoughts every week.
    One question that comes to mind when using leap call strategy that you talk about in your book (specially the bull strategy), did you consider adding a put side to the call. An example, adding either a debit put for protection (insurance) or some naked put for extra cash if you are very bullish?

    1. Hi Kais
      yes I have looked at various strategies and combinations – I’ve tested ‘flip the switch’ (where when you come out of call you immediately buy a put, & VV) but it performed woefully. I have in the past sold puts but I just can’t find enough upside in it – the risk, to me, far outweighs the benefits. For a non-risky put (say 5 days to expiry, 5% below current price) you are lucky to get even a cent! So I stick to the trend – if I am bullish I am always in calls, and would only consider selling a put if I was pretty sure it wasn’t going to be hit and there was enough money in it. If you find such a situation please let us know – I am sure a lot of people would be very interested.
      Thanks!
      h

  4. Since SPY is expensive and many cannot afford to do Options with it, of course you gave a great choice of using SPYG. I’m wondering if SPLG would be a good alternative, as it follows the SPY almost perfectly, but has a much lower price of $54? What are your thoughts?

    1. HI _ just had a look at SPLG, and compared the holdings with SPY & SPYG – a comparison of the top 10 is at the bottom of the comments. It does follow SPY, and it does have an options chain that allows you to get DITM options. My only reservation would be the spreads. If we take the March 2024 $27 strike (50% of current price) the bid / ask is $25.80 / $28.80, which is 11.6%. Given that you will probably have to buy at the ask (as it is very lightly traded) then your effective price is 2.7% above current price.
      If you could get, say, midway between the bid / ask then it would probably work as the ask would give you an effective price BELO the current price.
      So – in summary – the underlying seems good, it is just whether the spread in the option chains enables you to do ITM.
      Hope this helps
      h

  5. Other than ITM, for my day to day trading, I follow the technicals. I learned long ago (the hard way), not to listen to the Jim Cramer’s, of the world, or any of the analysts that we see daily on the TV. I laugh when I see all these strong buys and then I look at the chart and they have already stretched the limits of the highs, or have already started their journey down. Never trust the analysts, only trust your own eyes by looking at the charts.

  6. Speaking of leveraged ETFs and your mentioning of day trading using $5k, we can sell weekly cash secured put or sell weekly covered call on TQQQ and collect weekly premium to accumulate TQQQ shares. The reason I choose TQQQ because it is the largest leveraged ETF. Please only use $5k and try this trading strategy.

    1. HI George
      sorry, it took me a while to get round to checking this out. I have a couple of problems with making this work.
      Firstly, TQQQ is a 3X ETF, and so only suitable for day trading (not recommended for long term trading), so holding the stock and selling covered calls is a bit hair-raising. Of course, we could sell cash-secured puts, but I don’t find the arithmetic compelling.
      At today’s prices, with TQQQ trading at $44.83. we could sell a $42 put 4 days to expriy for $29. This strike is 6.3% below where it is currently trading, and sounds like a big drop – except for the fact that it is a 3X leverage. The payoff is max profit $29 / Max loss $4,171. I know that it is unlikely to incur a maximim loss, but the breakeven is $41,71 and it was trading at this level 5 days ago.
      I would really love to be able to make this work, and I am quite happy to do trades with a 4% / 09% risk level – but not with leveraged ETFs.
      I must look into weekly income a bit more – I used to do it a lot, and it worked, so maybe I should resurrect my old systems!
      h

      1. Hi Heather,

        Thank you for your detailed explanations. To make this TQQQ weekly trade of selling cash secured put and selling covered call work, we need to start with $5k and if TQQQ is going down from the $40s range to the $30s range, then we need to come up with $4k to continue this trading method to accumulate more shares at lower average costs. Start with $5k plus $4k plus $3k plus $2k plus $1k for a total of $20k in capital.

        Sincerely,
        George

        1. HI George – I see what you are trying to do – but I have a problem with trading leveraged ETFs for anything more than a day. Possibly I am too faint-hearted! Please let us know how you go! (and if you respond when taking off in your helicopter from your beautiful villa in Tahiti we’ll all kick ourselves!)

  7. Gréât insight each time-reality, not b.s. You are thé very Best !!

    Have a gréât holiday season.

    L
    .

Comments are closed.

Cover photo: Nicole Avagliano, Unsplash

heather Cullen Blog SPLG

Heather Cullen

Stay up to date

Get notified when there is an ITM Update

Heather Cullen

Book Series

More Blogs

Heather Cullen

Thank you – your message has been sent. Please note that  as of July 2022 Heather will answer all questions in the ITM Blog, not individually. You will be notified when there is a new blog post. Happy trading!