Lest We Forget

In Flanders fields the poppies blow

Between the crosses, row on row,

    That mark our place; and in the sky

    The larks, still bravely singing, fly

Scarce heard amid the guns below.

We are the Dead. Short days ago

We lived, felt dawn, saw sunset glow,

    Loved and were loved, and now we lie,

        In Flanders fields.

Take up our quarrel with the foe:

To you from failing hands we throw

    The torch; be yours to hold it high.

    If ye break faith with us who die

We shall not sleep, though poppies grow

        In Flanders fields.

 

https://www.youtube.com/watch?v=NQmMqZlLFVc

eBookDaily does me a favor

They promoted my book for free.  Pretty cool, huh?

Check it out:

https://ebookdaily.com/free-kindle-ebooks/2024-10-25/B075SRFYV8

I can confirm that I saw a spike in free downloads, so this site is legit.

Thanks, eBookDaily!  :D

No damage here

I haven't blogged since before Hurricane Helene, so I figured I should state for the record that I'm fine and have suffered no property damage.  A bunch of sticks and a few large limbs were in the yard, but that's it.

I missed the northern lights last night.  Apparently, I could have seen it from here.  I found out about it too late.

I know the season is changing because the toilet mechanism is making some clicking and groaning noises.  Man, I hate plumbing.  It's better than not having it at all, but it still sucks.

I've been seeing some odd holes in the ground.  They look like acorn holes dug by squirrels, but they're deeper than the usual holes the squirrels dig.  Further from the trees, too.  Makes me wonder if this is one of those folklore signs about an unusually cold winter approaching.  Or maybe it's not squirrels at all and some other critter is responsible.

The response from volunteers helping out in Appalachia in the wake of Hurricane Helene has been a rare ray of sunshine in an otherwise gloomy decade.  Nice to see kindhearted folks donating their time, money, and effort for selfless reasons.  It's way too easy to forget that such people exist.

Gearing up

Something occurred to me the other day.  It had been tickling the back of my mind for a while, but I've only just recently been able to wrap my brain around it.

In some movies, particularly action movies, we often see the main character or characters gearing up in preparation for the big climactic battle.  For example, Commando, when Matrix is on the beach at the island.

 

 

Another example is in The Two Towers.

 

 

A common theme in these scenes is a sense of impending epic victory.  They inspire confidence in us viewers.  We feel like our heroes are ready to slay all the dragons.  Or, if they fail, then at least they'll go down in triumphant and legendary fashion.

And this is what makes the baptism sequence from The Godfather so interesting.  The mood there is completely different.  It feels like ordinary men, not extraordinary ones, getting ready in pedestrian fashion.  We see the old, overweight Clemenza huffing and puffing his way up the stairs, and we're sort of wondering if he'll make it to the top before having a heart attack.  We see Cicci getting a shave at the barber's while waiting for his target.  We see Al Neri donning the police uniform and mopping the sweat from his face.

 

It's all very workmanlike.  It's the wiseguy equivalent of punching a clock.  These guys don't have any illusions about what they're doing.  It's just a job.  And since they don't look like heroes or larger than life or anything of the sort, we're not as confident that they'll succeed.  Instead of creating excitement and eager anticipation like in Commando, this scene builds suspense.  We're nervous.  And that's what makes it so awesome.  It's one of the best climactic sequences ever put on film.

Powell flinches

As an old saying goes, the hardest part about playing chicken is knowing when to flinch.  The Fed cut interest rates by fifty basis points last week, and I think it's safe to describe that as a flinch.  Whatever game the Fed was playing, they're not playing it anymore.

So what does this mean going forward?  Beats me, y'all.  I remember the Fed cutting rates all through the 2008-2009 financial crisis, so cutting rates in and of itself isn't some magic pill of rising stock prices.  Until we see the stock market actually start to falter, though, we have to assume that inflation will drive prices higher.  We saw this with gold this past week; it's still making new all-time highs.

But this is the reckoning season for stocks.  September and October are like swords of Damocles, historically speaking.  If there's going to be a crash, then I expect to see it within the next month, because this time of year is when these things often happen.  (Late winter/early spring is another danger zone.)

The 2020s have been full of insanity and destruction, and I fear this eldritch horror of a decade isn't finished tormenting us yet.  Screw your courage to the sticking place, folks, because you might need it in the days ahead.

Wild swings

We've seen some dramatic moves in the stock market recently, both bullish and bearish.  That sort of whipsaw can be tough to get a read on, and I'm not sure what to make of it myself.  The market seems a bit schizophrenic, frankly.

Commodities have been more clear-cut.  Gold made new all-time highs last week, and oil hit a 52-week low.  Each commodity's direction is obvious.

Oil won't fall forever, because the modern world is dependent on it, but it might fall a bit further yet.  I could see it potentially going to fifty or so before heading back up.  Low oil prices are a good time to buy oil-related stocks at a discount, so don't miss out.

Gold will continue climbing, because why shouldn't it?  Inflation hasn't stopped, nor has global de-dollarization, nor have central banks stopped buying gold.  All these factors and more conspire to push gold higher.

The elephant in the room, of course, is the Fed's meeting this week.  An interest rate cut is expected by pretty much everyone; the only question is how big the cut will be.  I personally think there's a non-trivial chance of no cut at all.  I think Jay Powell might do his "Lucy with the football" routine yet again.  If Powell's in a proxy war with the Bank of Japan and the European Central Bank, as some commentators believe, then it's not time to cut rates yet.  Not until the opponents cry uncle good and hard.

Finally, there's the fact that this is September, a historically bad month for stocks.  If there's going to be a crash this calendar year, then September and October are the best bets.  A Fed surprise this week might just be the trigger.

Mission success

Congratulations to SpaceX and everyone involved with the Polaris Dawn mission.  :)

Yeah, I think "first private spacewalk" is a pretty cool line to have on one's resume.

Next up is Mars, I guess.  Elon already laid it out:

After the uncrewed tests, Musk wants to have crews onboard a Starship mission to Mars in about four years. The “flight rate will grow exponentially from there, with the goal of building a self-sustaining city in about 20 years,” added Musk.

A city on Mars in twenty years.  Wildly ambitious, yet I know better than to doubt the man.  He's like Howard Hughes crossed with Tony Stark.

I just hope there's a train to carry ice miners to and from the polar cap like in my book.  Every planet needs a train.

Joro proverb

 Decided to try my hand at an old-fashioned-style farmer's proverb:

 

When Joro spiders first appear

College football season's here

When Joro spiders rule the land

Halloween is close at hand

Polaris Dawn is under way

Successful launch on Tuesday.  Mission is proceeding.  :D

From space.com:

Polaris Dawn will attempt its historic spacewalk on Thursday (Sept. 12) at 2:23 a.m. ET (0623 GMT), SpaceX wrote in a mission description on its website.

Looking forward to it.

And as a child of the 1980s, I'm still hoping to see some Colonial Marines with pulse rifles at some point.  Elon, can you do this for us?  Pretty please?

More delays

Polaris Dawn is delayed again.  😞

Furthermore, SpaceX is grounded.

The Federal Aviation Administration temporarily grounded SpaceX Falcon 9 rockets on Wednesday after a booster failed to land upright and exploded following the successful launch of Starlink satellites.

Such are the frustrating realities of space missions.

Gold reaching new all-time highs

Inflation has been a hot topic for a while now, but however bad or negligible one thinks it is, the fact of the matter is that gold is not fooled by any sort of rhetoric or hand-waving.  It continues to charge ahead, breaching the $2500 mark recently.  When governments and central banks stop trusting one another and get jittery about the future, they tend to stock up on gold, and we've certainly seen a little bit of that from various countries.

Strangely, oil hasn't really followed suit.  You'd think it would, geopolitical considerations notwithstanding.  But it's still in its tight trading channel between $70 and $84, the same place it's been for the last year.  It's currently $77.38.

Silver is also lagging, currently at $29.83 per ounce, off its recent high of over $32 back in May.  Gold has pushed higher in recent months, but silver has cooled off a bit.  Granted, silver isn't hoarded by governments like gold is, but it's still weird.

The elephant in the room, of course, is the Fed.  Jay Powell hinted about rate cuts last week, and the stock market responded positively.  A September rate cut is now expected.  I'm still not convinced.  I think this is another "Lucy with the football" routine from Powell.  Next Fed meeting is September 17-18, so we'll see then.

Polaris Dawn postponed one day

Polaris Dawn was due to launch Tuesday, but they had some kind of helium leak, so they pushed it back to Wednesday morning.

The historic part:

The highlight of the five-day mission is expected to come two days after launch, when the crew embarks on a 20-minute spacewalk 434 miles (700 km) from earth, in history's first such private spacewalk.

Add in the recent news about SpaceX having to step into Boeing's shoes due to the latter's seemingly recent inability to do anything right, and it's shaping up to be a banner month for SpaceX.

I hate it for Boeing, because it's a storied company with a history of amazing achievements.  I really hope they get their problems sorted out.  But until they do, it's nice to know that SpaceX is ready to stand in the gap.

Here's wishing for a successful launch on Wednesday and an incident-free mission.

Lower still

Well, I didn't get the dead-cat bounce I thought we might get during Monday's trading action.  Quite the opposite: stocks tanked.  Volatility spiked.  Almost everything was in the red.

It's starting to feel like 2008 again.  Except with more wars and civil unrest.

On the other hand, we're only talking about the last couple of months worth of gains being wiped out, so we haven't actually seen much carnage yet.  During the 2020 Covid crash, the S&P 500 lost about a third of its value.  So far during this correction, the S&P hasn't even declined ten percent from its recent high.  Not time to panic yet, nor is it time to buy.

This calendar year started out slow and dull, but it's shaping up to be a wild one down the stretch.  Steel yourself accordingly.

What Monday might bring...

It definitely looks as if the shine is coming off the AI bubble.  Intel got quite the haircut on Friday, shaving off 26% of its stock price.  Nvidia reports earnings at the end of August, and I'm sure the whole financial community will be holding its collective breath on that one.

It wasn't just AI-related stuff that took a cut on Friday, though.  Almost everything was down to some degree or other.  Japanese stocks were hit hard due to the Bank of Japan deciding to raise interest rates for the first time in what seems like forever.  Commodities pulled back, too.

So what fared best?  Well, in my own portfolio, it was bond funds and REITs.  That stuff was in the green while everything else was in the red.  What can we glean from that?  Well, I don't really know.  Bonds and real estate are both sectors that are highly sensitive to interest rates, so if those things are up, then that could be construed as a sign that investors think a rate cut is coming soon.  We've already seen all sorts of chatter about a rate cut in September, but the Fed talks and chatter walks, right?  At the end of the day, Jay Powell is driving this boat.  I personally think he's being a tease.  I think he has no intention of lowering rates soon, but he wants to dangle the possibility in front of everyone for reasons of his own.  He's Lucy with the football.  But I guess we'll see in due time.

I wouldn't be surprised to see a dead-cat bounce on Monday after Friday's sell-off.  That's the thing about big moves on a Friday: the traders have the whole weekend to second-guess their decisions, and by the time Monday morning rolls around, they're itching to hedge a bit.

But there's a good chance that this AI stuff will spark the long-awaited correction.  All the indicators say we're due for a pullback, and those indicators have been saying it for a long time now.  I actually thought this would start last fall.  I guess the AI bubble delayed everything a bit.  But it looks like now it might actually be here, and if it is, y'all had better hold on tight, because the bottom is a long way down.

Is the smart money bailing out?

The stock market action over the past few sessions has been interesting.  For almost all of 2024, the market's gains have been fueled by the Magnificent 7 stocks (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla).  The rest of the market has basically just gone sideways.  If you include inflation--which is always more severe than the government says, regardless of which political party is doing the saying--then small caps have actually declined in real terms.

Now we're seeing something different.  The S&P 500 index doesn't seem to have changed much.  It's still a nice ramp upwards.

(I'm having trouble posting images right now.  Blogger is being difficult.  Sorry.)

When you look at the equal-weight version of the S&P 500 index, you see a dramatic spike upwards over the past five trading sessions.  It went nowhere all year, and now it's at an all-time high for 2024.

And the small cap index is even more pronounced.  Not only have the past four sessions all spiked up, but they've gapped up.  Volume for the iShares Russell 2000 is two to three times what it was just the week before.

This suggests to me that the smart money is taking profits from their Mag-7 holdings and putting that money into small caps.  Maybe the smart money knows something, or maybe they're just trying to read the tea leaves regarding Jay Powell's statements.  I don't know.  But something has definitely changed, and it's changed in a big way.

Gold has also risen lately, though not as dramatically as small caps.  I think gold is reacting to Powell/inflation only, whereas the smart money is reacting to both that and the fundamentals and technical indicators regarding the Mag-7 stocks.  But all that's just a guess on my part.

I don't have any Mag-7 shares, but if I did, I'd be tightening my stops.

Brutal heat wave

Hasn't rained for a few weeks now.  Additionally, temps have risen to late-July norms.  Highs in the mid-90s this week.

Flora are already starting to wilt, and grass is already turning brown.

The last major drought around here was in 1998-2000.  The 21st century has delivered rainier-than-expected summers.  Until now.

Chance of rain Wednesday, but that forecast is still several days away, so it's basically meaningless as far as accuracy goes.

I just hope we get at least one good drenching shower before July 4th, otherwise there's going to be an outbreak of fires when some fireworks inevitably land on dead grass.

On the petrodollar

There's a lot of discussion going on about the Petrodollar coming to an end a few days ago due to the expiration of a treaty.  There are sites debunking this, claiming that no such treaty formalized the Petrodollar and that it's all just fake news.  The truth, as usual, is somewhere in the middle.

Yes, there was a Petrodollar agreement.  But it was an informal one, not part of a treaty.  And the relationship has been slowly but steadily unwinding.  Saudi Arabia joined the BRICS this year, and that's a move that, in geopolitical terms, aligns them against the West.  I'm not sure if the BRICS founders intended for it to become a proxy for a new anti-Western political bloc, but that's sort of what it is now whether anyone likes it or not.  Any country that joins BRICS is going to be seen as an enemy by the West, or at least not a friend, even if the country's motives are purely economic and otherwise friendly.

In the past, the U.S. government could enforce its monetary policy using military force and the threat thereof.  (Mostly implicitly, of course, not explicitly, because explicit threats are way too gauche for most career diplomats.)  That paradigm, though, is not so much the case anymore.  A series of failures and humiliations has eroded the rest of the world's fear of the U.S. military.  Other countries are no longer cowed into using the dollar, so they feel safe in exploring other options.  They're looking to Russia and China as examples, and perhaps even military protectors, and they're gradually lining up to hitch their wagons to the BRICS horse.

The dollar's inflationary chickens have slowly but steadily been coming home to roost, and there are a lot more chickens out there that haven't moved yet.  Where does money go to die?  Well, we might just find out the hard way.

The upcoming election, by the way, won't have any effect on any of this stuff.  No one in Washington is ready for what could possibly come.  They wouldn't even believe you if you warned them.  Intellectual and educational deficiencies aside, it's simply too far outside their normalcy bias.

Fukuyama's infamous slogan notwithstanding, history has not ended.  And I fear that within the next decade or so it will get way more exciting than any of us would ever want.

Mexican bloodbath

Not a literal bloodbath.  A figurative one.  I'm talking about Mexican stocks.

The country has elected a new President, and traders are not optimistic about her.  Mexican stocks got a bit of a haircut on Monday.

Here are the top losers from Monday's trading session.  Notice all the Mexican companies:

 

 

Mexico has enough problems already, and now this presumably disastrous new leader will... well, we don't know what she'll do.  Latin America can be a pretty wild place, politically speaking.  Anything is possible.  But if the financial experts are pessimistic, and they obviously are, then I'm inclined to be pessimistic too, at least until mitigating evidence appears.

I own some Latin American stocks, but no Mexican ones, and it looks like I won't be picking any up any time soon.

The A.I. Boom... or Bust?

It's no secret that the recent gains in the stock market have been concentrated in the A.I. sector.  It's been something like the Dotcom Bubble, though not anywhere to that extent.  Lots of enthusiasm and hype, high valuations, and mixed results when it comes to actual earnings.

The S&P 500 is top-heavy with A.I. stocks, hence its performance this year:

When we equally weigh the components, removing a little bit of the A.I. bias, we get results that, while still bullish, are a little more modest:

When we look only at small-cap stocks, completely removing heavy-hitting companies like Nvidia, Microsoft, Amazon, Google, and so on and so forth, we get results that are a bit more concerning:

The Russell 2000 index is about where it was at in late December.  It's gone sideways for this calendar year so far.  Whatever "bullishness" exists in the stock market, it seems to be a phenomenon of the large caps, not the small ones.  The A.I. boom has not trickled down to the little guys.  When you factor in inflation, the small caps are actually down slightly.

I've made this comparison between these three indexes in previous blog posts, but it's always good to revisit it every now and then to see if the prevailing patterns are still holding.  And that seems to be the case.  The "bull market" is an A.I. bandwagon ride, nothing more.

Now, Memorial Day weekend has just passed us by, so summer has now officially begun, which means travel season is here.  Maybe we'll see something interesting in the vacation-related economy.  I don't know.

There's a Federal Reserve board meeting in the middle of June.  Lots of people have been expecting an interest rate cut at that meeting.  I'm a bit more skeptical.  I'm not sure if a rate cut is priced into the market or not, though.  The Fed might remain hawkish on inflation, but the market might not be bothered by it much at all.  We'll just have to see.

Oil and gold have risen in recent months, but not as much as I would have expected given the geopolitical realities.  My portfolio is still oil-heavy, though.  As long as there's a "war on oil" in this country, I expect non-American oil companies to benefit.  The modern world runs on oil whether people like it or not.

What does the summer hold?  Well, I don't know.  Summer is usually a dead season for stocks, though there has been the occasional bull-market summer before.  I'm inclined to say the action will be mostly sideways until evidence to the contrary presents itself.

BRICS summit in October in Russia.  If there's going to be any major global economic news, I expect it to happen then.  That at least gives us the whole summer to chill out, though, so that's what I intend to do.  I recommend everyone else to stay cool, too.  There will be plenty of things to panic about in the fall.

Testing resistance and oscillators

So we've had a bit of a pullback in the stock market in recent weeks.  We're going to look at three charts: the S&P 500, the S&P equal-weight, and the Russell small-cap.

First, the S&P 500:

 

As we can see, this index has had a nice run in recent months.  It broke through the 50-day moving average back in November and never fell below it, not even once, until mid-April.  This month has seen it correct a bit, but it hasn't actually declined that much.

There are two interesting indicators on that chart: the 50-day moving average, and the MACD oscillator at the bottom.  The 50-DMA is acting as resistance now, and indeed yesterday's trading action seems to have risen to that line and bounced off.  That's a bearish sign.  The other indicator is the MACD, and it clearly shows an oversold condition and an imminent signal line crossover.  That's a bullish sign.

Which indicator will prove to be the stronger force?  I don't know, but if the index fails to break through the 50-DMA this week, then it's probably heading further down.

We see a similar pattern in the S&P equally-weighted index.  It rose to the 50-DMA and then was stopped cold, signalling bear, while the MACD is signalling bull.

Also of note is that this version of the index hasn't risen as much as the $SPX version.  That's because $SPX is heavily weighted towards a handful of giant companies that have shot up due to the AI craze.  The equal-weight version isn't as AI-heavy, so its gain has been more modest.

And we see this difference even more clearly when we look just at small-caps.  Here's the chart for the Russell 2000 ETF:

This index hasn't gone anywhere this calendar year.  It's where it was back in December.  The MACD is signalling the same thing it's signalling for the other charts, but the 50-DMA hasn't been tested yet.  There's still some white space to cover before any bounce or breakthrough happens.

It's nearly May, and the old saying "sell in May and go away" must be considered as a possible influence on next month's action.  There's also the inverted yield curve, a real estate index that peaked in December, banking troubles as a result of higher interest rates, and so on and so forth, all bearish.  On the other hand, there are multiple powerful inflationary forces that might force prices higher, so the market might go up in spite of all the forces to the contrary.  We should know over the next few weeks whether this pullback is just a consolidation or if it's the beginning of a serious correction.

The Indefatigable Bull

This stock market continues to defy my attempts to figure it out.  Since early November, it's been practically a straight line going up at about 25 degrees above horizontal.  I've never seen a cleaner bull market trend line.  Frankly, it's too perfect, and I can't help but wonder how much of it is the result of human activity and how much is just bots and algorithms making automated trades.

Gold continues to hit new highs.  It's been doing this for the past few weeks.  The price of everything seems to be climbing at a disturbing and unsustainable rate, so naturally the powers that be say that inflation is under control.  (That was sarcasm in case you weren't sure.  Inflation is actually quite onerous, and lots of people are suffering because they can't afford anything.)

I own several South American stocks, so I'm now keeping on eye on the political squabbling that has erupted on that continent recently.  The embassy raid in Ecuador is just the latest in a series of dust-ups.  In all the talk of a potential World War III that's been going on lately, commentators usually focus on Russia, Ukraine, NATO, and the Middle East.  No one is talking about WWIII breaking out in South America, and that makes my inner contrarian think that's where it might start.

Stock market crashes often happen in September and October, but if I recall correctly, April and May are the next best months for it to happen.  If we can make it to June without a crash or correction, then maybe we can have a soft-landing consolidation or something during the summer.

In the meantime, though, the bull market seems unstoppable.  I'm not selling out.  I'm keeping my positions, collecting my dividends, and waiting for the wave to crest.

But crest it must, eventually, and woe to those who get caught in the undertow.

Just sent my first Substack newsletter email

Hopefully I didn't screw it up too badly.  Lol...

I'm subscribed to my own newsletter, and I got the email, so I know it went out.  But everyone is on different devices and whatnot, and there's no telling how the newsletter might display on any given machine.

Anyway, at least I got the first one out of the way.

Miscellaneous stuff

I think I'm ready to start sending out my newsletter in Substack.  TinyLetter is going away, so I had to find a replacement, and I decided to go with Substack.  There will be some cosmetic differences in the emails, but hopefully there won't be any real snags.

SpaceX is heading for the moon.  On the one hand, I'm not a fan of moon missions because I think it's just a useless rock with no real promise, but on the other hand, it's still a really cool thing to do.  I even picked up some shares of Intuitive Machines as a result of the successful launch and in the hopes of a successful landing and mission.  Which brings me to my next point...

I bought shares of a couple of stocks on Thursday.  I did this in spite of the fact that I think markets are overbought and in need of a correction.  My gut tells me that this purchase of mine can be considered a contrarian indicator; in other words, my finally giving in is what will signal the start of the decline.  Will we see a correction within the next few weeks?  I think the odds of it just got significantly better.

As part of the moon mission, the Columbia apparel company is using its Omni-Heat Infinity technology to shield the craft from the extreme temperatures of space.  Here's a YouTube video about it:

 

I like and sometimes wear Columbia's stuff, and I think this promotional venture of theirs, while admittedly a bit gimmicky, is nonetheless pretty darn cool.  By modern marketing standards--by which I mean we live in an era in which corporate marketing departments seem to be purposefully trying to destroy their brands--it's downright genius.  After I publish this blog post, I'm going to go over to Yahoo Finance and take a look at Columbia's stock info.

I've started gaining weight again.  I'm about ten pounds heavier than where I'd like to be.  I'll try to reduce that in the weeks ahead.  My overall fitness level is really quite pathetic.

I finished The Hour of the Dragon, the only novel-length Conan story by Robert Howard.  It was a serviceable enough book.  I could have done without the "he ejaculated" dialog tags and other goofy devices, but it was still a Conan story, so it still had all the awesome stuff for which such stories are famous.

Charging ahead

I just can't get a handle on this stock market.  Nothing seems to faze it, not even the usual technical indicators.  RSI over 70?  Doesn't matter, we're going higher.  Low volatility?  Doesn't matter, we're going higher.  

Geopolitical unrest increasing in various places around the globe?  Doesn't matter.  Credit and mortgage problems on the rise?  Doesn't matter.  Chinese stock market falling to lowest levels since 2019?  Doesn't--well, you get the idea.

I think there's an inflation report coming out tomorrow, so maybe that will cause a ripple.  But I doubt it.

Rates unchanged as expected

The Federal Reserve left rates unchanged, and that's no surprise.  The question everyone is trying to figure out is when they'll start cutting.  From what I can tell, no one is considering the possibility of zero rate cuts in 2024, and the notion of a rate increase is basically unthinkable.  The market has priced in rate cuts, and any news that shakes that faith should have a bearish effect on stocks.

Meanwhile, the S&P 500 has charged ahead to new highs this year.

 

The chart is just a bit misleading, though.  The S&P 500 is heavily weighted towards the Magnificent 7 stocks.  Most of the gains have come from those stocks: Microsoft, Alphabet, Amazon, Apple, Meta, Nvidia, and Tesla.  A significant part of those companies' gains are undoubtedly due to the A.I. craze of last year.

So, those companies aside, what does the market look like in general?  For that, we look at the "equal weight" chart of the S&P 500.  In this one, all of the components of the index are given equal weight.  Here it is:

 

As you can see, no new highs in 2024 for the equal-weight version.

In fact, the lack of gains is even more apparent when you broaden the timeline out to five years.  Here's the normal (unequally weighted) chart for the index:

 

And here's the equal-weight version over the same time period:

In this second chart, the market peaked in January of 2022 and has yet to revisit that high.  Take out the bias towards the Magnificent 7, and stocks have basically gone sideways for two years.

I thought in December that we'd see a correction in the first quarter of this year, and I still think that.  So far, though, all the would-be catalysts for market declines have amounted to nought.  Red Sea traffic disruptions, Middle East conflicts, Russo-Ukrainian stuff, farmer protests in Europe, all of the myriad American domestic issues... none have succeeded in spooking the market.  It seems highly irrational to me, but, as the saying goes, markets can remain irrational longer than you can remain solvent.

Just FYI, though... the VIX is about where it was in late 2019/early 2020.  I expected a correction then, too, and we got an outright crash in February/March of 2020 as a result of the Covid panic.  Here's the five-year chart of the VIX with the 2020 spike readily apparent:

The starter gun is cocked.  All we need is some event to pull the trigger.

We'll see what February brings us.

Happy New Year!

The 2020s have been a difficult few years.  I think we can all agree on that.  But hope springs eternal, and for all things there is a time, and perhaps 2024 will see some positive things come into their own.

Best of luck in the coming year, folks, and take care.  :)