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Momentum Monday - More Volatility in 2024?
Howard Lindzon
January 02, 2024
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Good morning…
As usual Ivanhoff and I are back at it on the weekend making Momentum Monday. We cover a LOT of ground this week. I don’t know how the year will play out but have been making my predictions in the newsletter the last few weeks. I do believe we will see higher volatility this year as money rotates, especially if it comes out of the big cap technology stocks.
You can watch this weeks episode of Momentum Monday and last weeks episode of Trends with Friends on my YouTube channel. It is easy to subscribe and if you do so, every Sunday you will get an alert when the show get posted.
Chapters:
Here are Ivanhoff’s thoughts:
Will we see a big move at the beginning of the new year that will continue the trend of 2023 or will we see a quick shakeout to reduce the overly bullish sentiment? Both scenarios are equally possible. Both would offer great trading opportunities for the nimble.
A gap-and-go opening of the New Year will stir the speculative juices and lead to big moves in small and micro caps. Historically, small caps outperform significantly in the first three weeks of a new year. There are quite a few mid and large-cap stocks that are also potentially setting up for a breakout – NVDA, MSFT, WDAY, FOUR, SNOW, IOT, etc.
Many are super bullish on the first two-three weeks of the year but I don’t exclude a possible shakeout to keep the entreme exuberance in check. A quick pullback can offer much better risk-to-reward setups. Dip buyers are waiting behind every corner. They tend to do well in a bullish market environment because most stocks make higher lows and higher highs. The ones that get smoked during uptrends are the chasers who blindly leverage themselves in super-extended stocks.
I wish you a wonderful New Year full of joy and happiness. Knowledge and habits compound, both good and bad habits. As to trading, the next year should always be your best in terms of execution because if you are doing things right, you are becoming an incrementally better trader or investor every year.
Featured Charts:
Have a great week.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here. -
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