2023 Market Ups and Downs: Insider Takes on the Biggest Surprises!

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December 27, 2023

 

2023's been a market marathon, filled with enough twists and turns to rival a rollercoaster built by M.C. Escher. Remember that meme stock surge in January? Yeah, that was just the warm-up. We've grappled with inflation's knockout punch, witnessed the Fed's fancy footwork on interest rates, and dodged the crypto crash's left hook. But hey, amidst the volatility, there were diamonds to be found (if you knew where to look).

 

As we dissect 2023's market mayhem in today's Traders on Trend, we'll break down the wins, the losses, and the "what-were-they-thinking?" moments that defined the year. Plus, in "Chart of the Day," we'll scale the treacherous Triangle of Opportunity lurking within the QQQ chart. And don't forget our usual dose of market-moving news and random, but ridiculously insightful, tidbits. Because let's face it, even in the financial jungle, a little laughter keeps the lions at bay.

 

Speaking of staying ahead of the pack, a big shout-out to our sponsor, DTI, your ultimate compass in this market maze, guiding you towards greener pastures (and hopefully fatter portfolios). Traders, let's begin and let's hack our way through this year’s market recap!

 

 

Today's Market Mood: EXTREMELY BULLISH!

The Bear/Bull Meter

 

Wall Street Waltz Continues, Small Caps Lead the Charge

 

Tuesday was a steady march higher for the U.S. stock market, with the S&P 500 inching closer to its all-time high. Every sector joined the upward climb, led by energy and small caps. Crude oil tensions fueled the energy surge, while small caps benefited from a double boost from both the energy sector and the finance sector, their home turf in the Russell 2000.

 

But investors should keep their cautionary boots on. Thin trading volume can make the market unpredictable, like a rogue wave on a calm beach. Last Wednesday's flash crash serves as a reminder that even a seemingly steady climb can stumble without warning. And speaking of stumbles, some of the "Magnificent Seven" tech giants took a breather today, showing that even the market's top performers need a time-out.

 

However, the overall rally remains strong and broad. Ninety percent of S&P 500 stocks are now above their 50-day moving averages, showcasing a coordinated advance. Even defensive sectors like utilities and staples joined the upward trend, adding further weight to the market's momentum.

 

And let's not forget the Treasury auction tango. The two-year note sale swayed investors, keeping yields in check across the board. With a five-year note auction on deck tomorrow, things could get interesting.

 

Here's how the market closed after today's session:

  • S&P 500: Up 0.42%, brushing shoulders with its all-time high.
  • Dow Jones: Up 0.2%, keeping pace with the broader market.
  • Nasdaq: Up 0.54%, leading the tech pack for a change.
  • 10-year Treasury yield: Down 1 basis point, maintaining a calm market pulse.
  • VIX: Down 0.38%, indicating low volatility on the trading floor.

With just three days left in 2023, the market is poised to end the year on a high note. But remember, the final steps can be tricky. Here are some strategies to keep in mind:

  • Focus on the small cap spotlight: These energetic players might have more moves left in them.
  • Be mindful of the "Santa Claus rally": This seasonal pattern could offer some last trading opportunities.
  • Manage your risk: Even the most seasoned market participants can stumble. Keep your stops tight and adjust your positions as the market evolves.

The final stretch of 2023's market marathon is just beginning. Let's keep our focus sharp and our strategies nimble, and remember, sometimes the best way to navigate a volatile market is to stay informed and adapt to the changing landscape.

 

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Market Mischief: Santa's Sleigh Upgrade?

 

Remember when everyone said inflation would melt Santa's reindeer by Christmas? Well, not only are they still prancing, but it seems Santa's considering an upgrade. Forget those eight tiny reindeer, rumors are swirling that St. Nick might be ditching the sleigh altogether and trading it for a Tesla Cybertruck. Talk about a green Christmas!

 

Imagine the scene: Santa zipping down chimneys in his electric sleigh, powered by the joy of children (and maybe a few sugar plum batteries). But hold on, investors. Before you go all-in on Tesla calls, remember: even Rudolph could get stuck in a blizzard. Keep your risk-management hat on, even when the market's feeling festive!

 

Chart of the Day

$QQQ Summit: Triangle of Happiness 

 

The QQQ chart's like a determined climber scaling a bullish triangle peak. It broke through resistance, then took a breather on the ledge, testing its newfound support. Now, it's eyeing the summit at $411, marked by the last gasp of resistance before the blue sky.

 

For ambitious investors, entry near $403 looks tempting. Just keep a safety rope – a stop-loss below $400 – in case the market gets vertigo. MACD and RSI, those trusty Sherpas, are flashing bullish signals, suggesting Call Options might be the perfect climbing gear. But remember, even Mount Everest has avalanches. Manage your risk like a seasoned mountaineer, and adjust your position if the market takes an unexpected turn. The QQQ summit awaits, but tread carefully and enjoy the view!

 

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2023's Market Coaster: Hits, Misses, and Lessons Learned from a Year on the Edge

 

While the future's full of sunshine and rainbows, according to certain optimistic gurus, we'd be remiss to ignore the wild ride of 2023. It's time to assess the hits, misses, and most importantly, the lessons learned from this market rollercoaster. 

 

Tech's Triumphant Return: Who would've predicted the tech revival after 2022's brutal beating? With inflation raging and the Fed throwing punches, pessimism was the flavor of the day. But guess what? Innovation proved its worth. Companies like Nvidia, pushing the boundaries of AI, soared above the clouds, reminding us that the information age ain't going anywhere. So, maybe those P/E ratios aren't just numbers – they're a glimpse into the future.

 

The Doom and Gloom That Didn't Doom: Remember the whispers of financial apocalypse? Gold stocks and bunkers were selling like hotcakes. Yet, despite the regional banking crisis in March, the world didn't end. Maybe Warren Buffett was right when he said you shouldn't bet against America's resilience. After all, authorities stepped in, the market held its breath, and guess what? We're still here.

 

Crypto: Generation Z's Trojan Horse: While millennials may still be scratching their heads over blockchain, Gen Z is embracing crypto like airdropped NFTs. Why? Demographics, friends. These kids grew up with smartphones in their cribs, the internet as their playground, and decentralization as their anthem. So, it's no surprise they're betting on digital assets. If you're looking for long-term trends, listen to the kids – they might just hold the key to the future.

 

The Takeaway: 2023 was a year of surprises, resilience, and a healthy dose of "told you so." It taught us that innovation trumps pessimism, adaptability beats rigidity, and understanding generational shifts is key to deciphering market movements. So, as we close this chapter and prepare for the next, remember: keep your eyes on the horizon, your finger on the pulse of change, and maybe, just maybe, invest in a few extra phone chargers for Gen Z. They're gonna need them.

 

Market Moves: Chips Up, Biotech Booms, and Retail's Mixed Bag

 

Headline Movers:

 

Intel (INTC): +5% as Israel chips in with $3.2 billion for a new chip plant. Looks like silicon valleys can bloom in the desert too.

RayzeBio (RYZB): +100% after Bristol-Myers Squibb (BMY) scoops them up for $4.1 billion. Boom! From radiopharmaceuticals to radio riches.

FedEx (FDX): +2% fueled by a $1 billion buyback. Seems they're putting their money where the packages are.

Apple (AAPL): -1% despite a Biden thumbs-down on an Apple Watch ban. Patent battles never get old, do they?

 

Economy in Focus:

 

Housing Hot?: Home prices keep climbing, fueled by pent-up demand and lower mortgage rates. But watch out for that supply curve waiting to pounce.

Retail Reality: Holiday sales grew, but not as much as hoped. Mastercard says interest-rate jitters dampened the shopping spree.

Fed Forecast: Market expects rate cuts next year, but analysts say hold your horses. China's comeback could complicate things.

 

Data & Dates:

 

Tomorrow: Empty calendar, perfect for digesting today's news.

Thursday: Jobless claims, retail and wholesale inventories, and pending home sales. Get ready for a data dump!

Next week: Earnings quiet, but watch for Walgreens and Conagra.

Weekend: China's PMI takes center stage. Will the dragon roar back to life?

 

Takeaway:

 

Markets are taking a breather before the new year, but data and earnings provide plenty to chew on. Keep an eye on housing, retail, and China, and remember, even the Fed's crystal ball gets cloudy sometimes. 

 

Random Musings and the Time Machine

 

Random Musings:

 

What if the metaverse is just a simulation within a simulation, and we are all just avatars of some higher beings playing a game?

 

Is it better to invest in crypto or gold? Crypto may have more upside potential, but gold has more history and stability. Maybe the best option is to invest in both, and hedge your bets.

 

How do you measure the value of a company? Is it by its revenue, earnings, cash flow, assets, market cap, or something else? And how do you compare companies across different industries and regions? Maybe there is no one right answer, and value is in the eye of the beholder.

 

What is the best way to learn about the stock market? Is it by reading books, articles, newsletters, blogs, podcasts, or watching videos? Or is it by doing your own research, analysis, and trading? Maybe the best way is to combine all of these sources, and learn from your own successes and failures.

 

What is the most important skill for a trader? Is it technical analysis, fundamental analysis, risk management, psychology, or something else? Maybe the most important skill is adaptability, and the ability to change your strategy according to the market conditions.

 

   

On This Day in History, December 27:

 

On this day in 1776, George Washington crossed the Delaware River with his army, and surprised the British forces in Trenton, New Jersey. This was a pivotal moment in the American Revolutionary War, and a boost for the morale of the Continental Army.

 

On this day in 1818, the first performance of “Silent Night” took place in a church in Oberndorf, Austria. The song was composed by Franz Xaver Gruber, and the lyrics were written by Joseph Mohr. The song has since become one of the most popular and beloved Christmas carols in the world.

 

On this day in 1914, the Christmas truce occurred during World War I, when soldiers on both sides of the Western Front ceased hostilities and exchanged greetings, gifts, and songs. The truce was unofficial and spontaneous, and showed the humanity and goodwill of the soldiers amid the horrors of war.

 

On this day in 1991, Mikhail Gorbachev resigned as the president of the Soviet Union, and handed over his powers to Boris Yeltsin, the president of Russia. This marked the end of the Soviet Union, and the beginning of a new era of post-communist Russia and the other former Soviet republics.

 

On this day in 1832, Charles Babbage completes his Difference Engine No. 1, an early mechanical calculator that laid the groundwork for modern computers. Talk about long-term investments!

 

 

 

The Final Ledger

 

As 2023 draws to a close, the market's resembling a holiday feast: stuffed with surprises, some sweet, some spicy. Tech rebounded like a forgotten cheesecake, China remains a fortune cookie with an ambiguous filling, and crypto's still the mystery meat some love, others avoid. Remember, investors, diversification is your spice rack – sprinkle wisely and savor the ride!

 

So, raise a glass to a year that defied predictions and taught us valuable lessons. May 2024 bring even greater returns, and remember, even the market's wildest gyrations can't shake our investment wisdom. As Warren Buffett wisely said, "The best time to buy a stock is when it's on sale, not when it's flying off the shelves." Don’t forget to enjoy the holidays!

 

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