Opening New Doors…
One door closes, another opens…
Throughout our lives, we've been opening doors. Think about it. From the moment we apply to university or college, we're opening a new door towards higher education, acquiring the credentials needed to chase our dreams.
Switching jobs is no different. It represents the opening of another door, leading to a potentially more rewarding career. It's true that we can never be certain what lies behind each new door, but isn't that the allure? If we believed it would be worse, we wouldn't take that step, would we?
Even without the certainty of what we'll find, we're driven to explore, seeking something better. If we choose to close our doors, we deny ourselves the chance for advancement, resigning ourselves to the familiar. Zig Ziglar once said, "If you continue doing what you are doing, you will end up where you are headed." This rings true, especially if our current efforts align with our goals, like aspiring to a managerial position in an organization. However, if the thought of filling your manager's shoes doesn't excite you, it's high time to seek new doors.
At times, the choice to close a door isn't ours. Life's circumstances—such as being laid off—can force doors shut. Yet, in these moments, remember: “When one door shuts, another opens.” Such situations, while daunting, can lead us to paths we wouldn't have considered otherwise.
As we welcome the new year, this 1st of January 2024, I invite you to reflect: Are your current actions leading you to your desired destination? Are there unexplored doors you've always wanted to open? Don't hesitate to peek through these doors. Each holds a new opportunity, guiding you to your dreams. Remember, the world isn’t short of doors; it's only waiting for your next decision.
Recently, I faced a door of my own closing. It wasn't necessarily a bad ending; rather, it felt like a natural conclusion of that chapter. Let's venture into 2024 with the mindset that it could be our best year yet, as long as we continue to move forward. Good luck, and may what lies behind each new door be precisely what you've always wanted.
SPX (4769)
SPX did not make it back to previous high, closing the year at 4769, just 49 points short. Nevertheless, it had gained 24% over the year which is some great returns considering that the Fed had raised interest to its peak in 2023 at the fastest pace.
Many has asked what to expect in 2024, will the rally continue? Undoubtedly, it could but probably not before it cool off from the 9 week winning streak. It has gone up so much continuously to the extent, it scares me when a bad news on the market will spook the investors/traders on a major selloff. If you want to continue to ride the momentum up, remember to put a stop loss on your position to take profit in case the market move against you. Having some profits is always better than no profits.
As the fund managers closes their books for 2023, they should be happy with the returns made with the SPX gaining 24% overall and in fact many stocks has even given 3 digit gains. However, as they cross into 2024, they would have a problem as they now have a high watermark to breach in 2024. With this in mind, the market correction does not sound too bad for January for several reason. First to make a realisation of the 2023 profits and second, to create more opportunity to buy again stocks which has then been corrected from the overvaluation position.
At the last days of the trading year, the heat map looks like a safety rotation out of Technology and Communication Services. The move into healthcare and consumer defensive.
The 2023 market performance has been astounding. Mostly green and the bigcaps are all the winners for the year.
Sector wise, you see that Technology is leading the Group followed by Communication Services. The drive is mainly due to the expectation of the rates to hold after July 23 and reduce in 2024. As market has already factored in these since over half a year ago, the likelyhood of a continuation of such high returns may be limited.
We would rather focus on the opportunity on the laggards of 2023 to see undervaluation opportunity especially in the energy, consumer defensive and utilities.
We will probably cover some of these opportunities over the next weeks as we start 2024 another year of the unexpected for S&P 500.
Trading range for the week is 4700 to 4800.
NDX (16825)
NDX continues to stay above the previous high for the week, defending its new position. Apple regained some grounds last week after it managed to again start sales of its high end smart watches. Nevertheless, we do not expect any significant push up for AAPL as it lacks growth momentum.
A 54% return for the year is quite significant considering 2023 is not a great year economic wise for the US and Worldwide. Driven by greed and newsflows of the Fed pivot is something we need to be cautious. Protect your profits and watch early signs of any deterioration in corporate earnings coming 1Q 2024. Not forgetting jobs data as we shift from CPI which is now mostly a massaged number by the US government.
One consolation that the market can get is that 2024 is the Presidential Election year and in most cases, the market is bullish during an election year. If we continue to rally as the campaign intensifies, its again more upside that can come over the next few months.
NDX support at 15,800 and lets see if it we start a profit taking selloff in January. Historically, when December is a good month, January is going to be the opposite. At the end of the year, the market is already having early signs of profit taking. NDX needs to break and hold above 17,000 to continue the momentum up. Nasdaq futures has already breached 17,000 and that could also be an indication what to expect for the market. Watch it closely if it retraces below 17,000 level.
Trading range for the week is between 16700 to 17050.
HANG SENG INDEX (17043)
HSI made a large move last week, up 4.3%. The move to shift to underperforming markets was faster than expected. Hopefully the market gives up some of the gains this week to let us in for some long opportunities.
The lower support now at 16000 and resistance at 17000.
MARKET EXPECTATION 2024
We will just give a short synopsis of what we expect in 2024, a more detailed writeup will follow in the weeks to come in our Newsletter.
For 2024, we will focus more on the opportunities for the Asian markets in particular the Nikkei Index. The disparity in interest rate positions between Japan and US would give a natural directional expectation on the JPY/USD rate. Japan is still in negative interest regime with an expectation of an eventual rise (although we do not know how long before that can happen). But on the US side, the rates is going to be reduced in 2024. Henceforth, the strengthening of JPY and the weaking of USD could continue into 2024. Accumulation of JPY via trading the Japanese Index/Market could be a hedge towards the weakening of the USD. Strengthening of the JPY and higher interest could also bring down the Nikkei Index and its component stocks. Opportunity for shorts for overbought stocks could also provide more trading opportunities.
Hang Seng & China
Hang Seng is down 14% for the year. Compared to a 24% up for SPX and 54% up for Nasdaq is somewhat a real underperformer. The relatively low PE of corporates against its peers in US may be an attractive long play. Nevertheless, the main risk is still political and government intervention for China stocks. To reduce individual exposures, investment in ETFs or the Index would be preferred.
US Markets
For now, we would expect that the market to move sideways, albeit possibility of a higher run is still possible. Hence, selling calls to protect your overvalued stocks is not a bad idea. Even if the calls get ITM, you can realise and lock in your profits. Alternatively, continue to roll the ITM calls to squeeze as much premium as possible, as your position would not be any different if you let your stocks to be called away.
Focus would be more on the laggards sectors in 2023, ie. Healthcare, Energy and Utilities. Presential election play would also be interesting for the year.
Commodities
We will also focus more on trading of commodities, crude oil futures and gold futures. Targets would be the band movement of tops and bottoms and opposing directional trades in large day/weekly movements.
Besides Crude Oil and Gold, we will also start to monitor other previous metals such as silver and palladium.
Overall, we are excited for 2024 as we start to work on alternative investments/markets outside US equities. It will be a learning curve for us and hopefully we can also impart these golden nuggets to you through our Options Trading Newsletter. Looking forward to the continued support from all of you readers out there. Remember to share our work to your friends.
OPTIONS TODAY - TRADE STATUS ON SPY IRON CONDOR
The trade is starting to show profit and still in play as expected per our price action hypothesis. To hit our short strikes, SPX will need to move almost 2 standard deviation till expiry. We could say, our trade is in a very good position now. But anything could happen, lets monitor and see if this could be another winner from us.
HELP US GROW
Thanks for being a regular reader of our newsletter. We hope you had enjoyed reading as much as we enjoyed delivering it to you over more than 2 years now. If you value what we write, we hope you can help us grow our readership. We have just touched 13 US states and 19 countries. We think we can do better with your help as you would know 1-2 friends in states or countries which we are not there yet. Recommend us to your friends, share what you have learnt from us as they might too benefit from it… Thanks in advance 😉.
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TIKTOK VIDEOS
Happy New Year and May 2024 open new doors for you…
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DISCLOSURES
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options: https://www.theocc.com/components/docs/riskstoc.pdf
MYstyework is an Online Financial Literacy Educator and materials provided is solely by MYstylework and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. MYstylework, through its contents, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. MYstylework is not in the business of transacting securities trades or an investment adviser.