2024 is over, unfortunately it didn’t end well. The major averages opened a little higher, but selling soon came in and lasted pretty much the rest of the day. All the major averages finished near the bottom of their intraday trading ranges. The COMPQ and the NDX fell .90% and .87% respectively. The SPX lost .43%. Volume was higher across the board, according to IDB. ToS shows it lower. This would produce another distribution day on the major averages. Leading stocks were hit as well with the leaders index falling 1.46% on the day. The index closed low in its trading range on lower and below average volume. Recent action has been very negative. The rally looks like it is over. The charts of the major averages and the leaders index look pretty sickly. Some individual stocks are holding up, but a correction would get to them sooner or later. The leaders index is sitting right on its 50dma and any more negative action would cause it to break this important moving average. We have heavy distribution and a cluster. At this point protecting capital is the most important item and market exposure should be low.
2024 is now over and despite a less the attractive end, it has been a very good year. Now we have to look forward to next year. We are two years into the cyclical bull market that began in late 2022 and was confirmed by monthly Coppock buy signals in the Dow in January and the COMPQ and SPX in March of 2023. The two following years of 2023 and 2024 were both strong years that produced large gains for skilled market operators. We are now entering, or will soon enter, the third year after the monthly Coppock signal. This is a period when risks increase. We have also been seeing some ominous signs that could endanger the cyclical bull market we are in now. In the most recent cyclical bull markets the cycle has been longer than we see now. Since the 1995 signal the length of cyclical bull markets has been longer than it was previously. There are signs now that we have recently been seeing later in recent cycles. In the last couple of months there have been several Hindenburg Omen days, including a confirmed signal. This usually occurs late in a cycle and tells you that it is late in a cycle. There are also other signs, like the weak A/D line that are also flashing warning lights. These and some other items are what you see very late in a cycle. This could be telling us that this bull market will be shorter than recent bulls. If it works out that way we could see a bear market in 2025. It is too early to make those kind of calls, but we must be aware of the danger and realize that we are in a higher risk environment that we have been for the last two years. Hopefully the bull can continue in 2025, but we must realize that the best gains of this cyclical bull market have probably already been made. We will have to see how it plays out. Jerry
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