This week we have a stock market forecast for the week of 12/5/21 from our friend Bo Yoder of the Market Forecasting Academy. Be sure to leave a comment and let us know what you think!
The S&P 500 (SPY)
All the waiting and watching has paid off nicely as the S&P has topped and started to trend lower in earnest. This "break" will freak some folks out, but I still believe my forecast will prove true that this selling will catch a bid and reverse the market for a short period of time. Once that momentum burns off, a lower high will form, completing a "head and shoulders" pattern, and THEN WE CRASH.
I just don't see the Fed being able to pump us to new highs again. So I may eat my hat, but I'm going to be a seller of this market as I believe the QE/MMT world will come apart at the seams, and it's a generational move that I don't want to miss out on.
SPDR Gold Shares (GLD)
Gold whipsawed down into the top of the red zone for a second chance to all those who missed the initial call. After that, the bulls turned the market back to the bullish side and closed it out with a "Doji" reversal candlestick on the weekly chart.
If the stocks drop next week, it could produce a nice "flight to quality" for the precious metals markets.
Goldman Sachs (GS)
GS sold off slowly and steadily this week and is still creeping down to challenge the recent lows near $370, and if that swing structure can be violated, we will see a sharp acceleration as the last excuse for the bulls has been taken away.
I'm a gleeful doomer on this stock, and if I'm right, this entry will be one to print out and put on the trophy wall somewhere.
Ulta Beauty, Inc. (ULTA)
ULTA is a stock that has been in a long and steady uptrend for a long time. However, it's showing signs of reversal and the end of the trend, perhaps because their big retail channel is in chaos with all the looting and shoplifting in the retail sector recently.
Whatever the reason, this stock is undergoing a shift in supply/demand that should offer some nice profits to the short side. Any price within the red zone is considered attractive, with stops set above the red zone high.
As the market chooses the direction and we are forced to acknowledge a lot of the baloney that's going on, there are some themes that I am looking at and will hopefully find elegant entries soon. The 4th turning is never a safe or happy time, and in this cycle, humans seem to be hell-bent on escorting as many off this planet as possible, so life insurance would be a terrible business to be in, and funeral homes a booming one.
There are a lot of terrible truths that will be coming out, which will be hard for folks to deal with, so that means booze, cigarettes, and marijuana will be on fire (1930's roadmap replaying much?)
And then, there is the lack of workers and "automation" (robots), which will be a big part of the economy in the next 5-10 years. Lots of change, lots of money being forced to move from one place to another...
A FANTASTIC TIME to be a trader!
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About Bo Yoder:
Beginning his full-time trading career in 1997, Bo is a professional trader, partner at Market Forecasting Academy, developer of The Myalolipsis Technique, two-time author, and consultant to the financial industry on matters of market analysis and edge optimization.
Bo has been a featured speaker internationally for decades and has developed a reputation for trading live in front of an audience as a real-time example of what it is like to trade for a living.
In addition to his two books for McGraw-Hill, Mastering Futures Trading and Optimize Your Trading Edge (translated into German and Japanese), Bo has written articles published in top publications such as TheStreet.com, Technical Analysis of Stocks & Commodities, Trader's, Active Trader Magazine and Forbes to name a few.
Bo currently spends his time with his wife and son in the great state of Maine, where he trades, researches behavioral economics & neuropsychology, and is an enthusiastic sailboat racer.
He has an MBA from The Boston University School of Management.
Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation for their opinion.