Market Expectations for Thursday December 28, 2023

Market Continues to Defy Logic...

Market Insights and Analysis

In my 43-year career in finance, despite mild dyslexia, which has uniquely shaped my perspective, I've observed significant market changes, particularly since the pandemic. A notable shift occurred in 2019, with the introduction of fractional shares by most firms and the elimination of ticket fees, broadening market access.

I revisited a 2019 podcast where I predicted these changes would bring unprecedented liquidity and new participants into the markets. Indeed, daily market volumes have soared from 1-1.5 billion to 8.5 million. We've witnessed a paradigm shift in market behavior, with a recent surge in bullish sentiment contradicting the previous consensus of a market downturn.

This is evident in the consistent buying and higher weekly closes over the past eight weeks. However, the wave tech database indicates a potential consolidation, despite projections of a market rise into early January, likely influenced by the 'January effect'.

WaveTech Daily Database

Review of Activity for Wednesday, December 27th

The major indices showed a slight increase, with the NYSE experiencing light volume. A positive response to the $58 billion 5-year Treasury note sale led to a surge in indices, with the S&P 500 nearing its all-time high. However, the indices closed below these peaks. The real estate and healthcare sectors led gains, while energy declined. Treasury yields fell, bolstering the stock market's positive trend. Economic data included a decline in the Richmond Fed Manufacturing Index, indicating a contraction in manufacturing activity.

Performance Overview YTD:

- Nasdaq Composite: +44.3%

- S&P 500: +24.5%

- Russell 2000: +17.3%

- S&P Midcap 400: +15.6%

WaveTech Analysis 12-28-2023

 S&P 500 Futures: The chart suggests a potential decline towards the 21-day moving average, around 4770, with sideways movement expected. The 21-day moving average is currently at 4706. Thursday's key level is the S2 level at 4818.30, indicating possible liquidation.