2024 Outlook: A Tale of Two Halves
I want to start this off by saying that my analysis this year will be simple. I recently read a 2024 outlook that comprised of over 200 pages. In my opinion that is simply absurd. The bottom line is that like anything else, too much data is bad. Simple is better, but it doesn’t mean easy. In fact, the hallmark of a great teacher is being able to take complex ideas and distill them down into simple language that even a child could understand. That is what I aim to do here with this service. As one of my favorite traders says, “I do not do extraordinary things. I do ordinary things extraordinarily well.” While others inundate you with nonsense data that they nitpicked to fit their bias I want to focus on the most important yet simple aspect of all markets which is time and where we’re at in the cycle.
Now, this may be a hard concept to grasp, but once you do, investing becomes a lot easier. You will understand that above all, is price and time. Everything else that the media and people are telling you about the economy is just noise. I’m not saying its not important and that it should all be totally ignored but what I am saying is that if I was bullish, I could go out and find 1000 data points to support that argument on why the economy and markets are strong. Similarly, if I was bearish I could go out right now and find 1000 other data points to support that idea. The one difference in it all? Is where we are at in the cycle. You see the economy is literally always headed in one of two ways. We are always headed into either a boom or a bust, the difference, is TIME.
Since early 2023 I have been saying that we are in the beginning of the final stages of what will be the biggest global boom in history. This is where we get to the top of the cycle and the biggest gains are made just before the subsequent bust. Now, I am well aware of all the people screaming about the bad things going on around the world and in the economy. And guess what? They aren’t wrong.
There is a lot of bad news out there and a lot of it is true, but they are wrong in the sense that it’s all coming to an end tomorrow. You have to understand that this wall of worry can, and will, go on much longer than people think. This is going to be a tough year to navigate in the sense that there will be PLENTY of negative news stories to scare investors out of the market. It will once again be a year where we will likely see a large correction or two and everyone will be calling for doom only for the market to scream higher in the following months.
The biggest event this year is by far and away the U.S. presidential election. for the US and certainly the world this is a highly contested event based on opposing ideologies which can stoke some very high tensions when emotions run hot. This brings up a lot of uncertainties surrounding the outcome and what will happen whether this person or that person is elected. Markets hate uncertainties. We also know that markets are forward looking 6-12 months into the future depending on what you believe. So with one of the biggest events in the world happening in early November we should be expecting the market to start pricing in this uncertainty early in the year. We should also expect it to start pricing in the following result months before it actually happens.
With that said let’s look at some of the major past cycles in which we were also in an election year.
2024 Stock Market Outlook
Starting with the 20 year cycle in the stock market taking us back to 2004. The 20 year cycle is one of the most important cycles according to our Gann analysis. For the most part we have been following the early 2000s price action very closely with a low in 2022 and another low in March 2023 followed by a big rally into 2024. This is exactly what we saw in 2002-2004. We had a major low in October of 2002 and another one in March of 2003 20 years to the day. Below is a chart of the 2002 to 2005 time period.
The blue vertical lines show the major low in October 2002 and then the following major low in March of 2003 followed by a huge year. The purple box is the entire year of 2004 which was also a presidential election year. As you can see it was quite a rough first half of the year that then sorted out into a big finish. The major low formed around August 13 and was a phenomenal buying opportunity going into the end of that year. Overall, the year was volatile but ended up BULLISH.
Now let’s look at the 40 year cycle or two twenty year cycles. This time we are looking at 1984 which was also an election year and a year in the middle of a large bull market that went into 1987.
Once again, we can see some very similar price action on the whole. While not as similar as the 20 year cycle we still had a major low in the year of 82’ then 83’ was a big up year followed by a choppy 84’ that had a major low in late July but ultimately finished strong.
Now for what Gann called the Great Cycle or the 60 year cycle which is three twenty year cycles.1964 another presidential election year.
Looking at the preceding two years we once again see a major market low in October of 1962 followed by another big low in March of 1963. However, this time 1964 was a much stronger year highlighted in the purple box. We had a major low in early June and then again a double bottom in August but for the most part a very bullish year up until the final month.
We could keep going back and look at the 90 and 100 year cycles but the data gets a little blurry. 1934 was a down year but it was coming off the market still recovering from the great depression. 1933 was a great year and 1935 was another great year but 1934 got lost in the middle. It was also not an election year. 1924 or the 100 year cycle was an election year and it was a big up year more like 1964 but the charts are too old to show any meaningful look at it.
Overall, I think there are a few key takeaways from the above three cycles. First of all it’s clear that late July to early August has a high chance of marking a key inflection point. Particularly a major low. The second take away is that the first part of the year may be quite choppy with the market trying to price in the uncertainty of the election. The last and maybe most important take away, is that it was in fact a BULLISH year and not a crash or recession year.
So now we have looked at past cycles let’s look at some forecasts from some great traders and see how they match up with our Gann analysis.
This first forecast is from Larry Williams. Larry was winner of the 1987 futures trading competition and a legend in the stock market world. His forecast is below and you can find his full 2024 video here.
In this forecast we can see a similar setup to what we have outlined above. Early top in the year and then a rough stretch mostly until August and one final low in November that may prove to be significant but still a strong bullish second half.
Here is another forecast from a respected Gann Analyst I follow. This is based on the 3 major cycles I went over above.
Again, we see some similarities here with a high early in the year around mid to late February followed by a significant low in the April to May time frame and then a choppy summer that leads to the big low to buy in late July/ early August. We also see that final low form in November right around elections. Keep in mind that this projection is more so about time than it is about price. What you are looking at here is where the major lows and highs are and not necessarily the magnitude of the move.
Finally, the last forecast I have here is from @IntradayCycles on X.
A little bit more choppy here but the takeaway is the same. We see an high setup early in the year with a possible big low coming in around the April/May window followed up by a choppy summer that forms a double bottom around late July/early August. Then one more significant low in early November.
So now you have a few different looks to consider but the overall message is pointing to roughly the same outcome. A high early in the year followed by a low in April/May rough middle of the year and then a final major low in late July to early August before the big bull rally begins later in the year. This roadmap will give us key dates to watch as price trades into these significant windows. I imagine none of these forecasts will be exactly spot on but we can extract a general trend from them by looking at the past cycles.
The biggest months we will be on watch for are:
February- possible major high
May/June- possible significant low
Late July/EarlyAugust- possible major low
November- final significant low
2024 Crypto Outlook
Now onto crypto. For the sake of our outlook I am only going to cover a Bitcoin forecast. This is certainly a tougher one to call since there is not nearly the amount of data we have with the stock market however, we are going to apply the same principles. If you have not already, you should watch the Look Into 2024 video I posted the other day as it will be generally what I am covering here but now I will go more in depth.
We have a few big events for Bitcoin this year. First of all we are all aware of the ETF announcement likely coming this week, but we also have the halvening approaching in April. Now, I’m not here to argue whether thats a true catalyst or not. In my view it’s simply just more noise in the 4 year cycle but it does indeed create a narrative whether you agree with that or not.
The general idea is that this time is not different. In fact I believe the biggest reason Bitcoin will outperform stocks this year has nothing to do with the ETF or the halvening. I believe bitcoin will act more and more like gold in the sense that it’s a hedge against chaos. What we are seeing is an increasingly turbulent world that will continue to experience geopolitical turmoil and uncertainty with elections and government corruption.
The other major factor will be the global liquidity cycle and how that plays out.
As we can see by this chart from Raoul Pal, global liquidity is back on the rise after a major low made in 2022. This chart depicts how well crypto follows the global liquidity cycle matching its peaks and troughs.
I am no expert to this stuff but I do know that its all part of the cycle and it’s no surprise that we will see more small scale and large scale skirmishes break out as we go through the 2020’s. With currencies being weaponized, money printing to fund wars, questions about inflation and rates people will seek more durable and efficient assets. Again, I don’t need to get too deep into the why’s and the how’s all I know is that history and time suggest that crypto will continue to outperform other assets. Below is the only chart you need to see to convince you that you must own at least a small amount of crypto.
Having said that, just because crypto is the best performer, doesn’t mean it’s going to be up only. It simply means it will hold up better relative to stocks. So let’s look at some past crypto cycles and see what we can reasonably expect this year.
Starting with the 4 year cycle we go back to 2020. 2020 was two years from the 2018 bear market low and also a presidential election year. Currently 2024 will be 2 years from the 2022 bear market low so roughly the same year within the cycle. What we see here is an early year high marked February 12. Followed by the covid crash low into March 16 but then a quick recovery right back to where it was. After that the year was mostly a long grind sideways until October where the market began its massive 12 month blow off run.
Now let’s go back another 4 years to 2016.
2016 was again, a presidential election year that was also the second year out from the bear market low. If you compare the two charts so far they look quite similar in overall structure. This time we have an early year high on Jan. 8 followed by a quick low on the Jan. 15 but the market did not erase the January move down until later in February. We then proceeded to go sideways again for a few months finally catching a move up in the summer and then continuing sideways until the big move began in October.
Finally, if we go back one more 4 year cycle we have 2012.
I cannot say what year this was from a low because I do not have that data but what I can say is that this was once again a presidential election year. Again, notice the similarities. A major high on January 12, followed by a low on February 18. Then a long sideways grind until the end of May where a big summer move started. It went into mid August had a flash crash and then went sideways until October where the big run up began.
Now let’s combine all the cycles together to give us a roadmap for 2024. Below we have the 2021 cycle in purple. The 2020 cycle in green. The 2017 cycle in blue and the 2016 cycle in red. I have also highlighted several key time windows to watch for with the red vertical lines (first one is this week Jan. 9-15) as well as the all time high at $69,000.
There are several conclusions we can draw from these cycles. The first thing to notice is the seasonality of January and February. There is a sell off going into February in each of these years. Which is a major reason why I believe whatever news we get this week about an ETF will lead to a short but sharp sell off.
The market typically finds a low in early February and then resumes to where the selling began before trading back down into March. Then the market makes a nice move up into the second half of April where we see a high anywhere from late April to early May. From there we can see the theme is that May, June and July are not great months. They are sideways at best and in some cases a major sell off. One thing that is very notable on all the cycles is a major bottom in mid July. This may be the biggest turning point of the year considering we also see a big bottom around this time in stocks. We are going to want to watch this July-August window very closely. After that we see a nice move up into August and September where we go flat a bit then the big run begins sometime in the third quarter.
Overall, it gives us much the same picture as stocks but with less of a drawdown and more of a steady rise up until a big year end move. The first half of the year is choppy and sideways but rising steadily and the second half of the year we regain momentum and finish very strong where we will make a run towards all time highs.
The most important time frames to watch for will be:
January- possible major high
February/March- Major low (yearly low)
Late April/Early May- Significant high
July/August- major low
Conclusion
In my experience the market usually offers two incredibly good opportunities each year. This year we saw it in stocks with the March low and the October low both times were a screaming buy. In crypto we saw it at the same times with the March low and the end of year run we are in now. On both occasions we caught the lows almost to the dollar.
For 2024 it looks like the market may give us a big opportunity to catch a short early in the year and then a big opportunity to get long in early August. Of course, I cannot recommend shorting this market since it is a bull market so we will continue to look for opportunities to invest longer term. As for crypto I anticipate that alt coins will do significantly better than bitcoin this year. There were plenty of opportunities in 2023 and there will be even more in 2024.
It may not be the resounding bull market for stocks that we had in 2023 but it will be a bullish year on the whole. Stocks may get mugged a few times and there will be plenty of scary headlines but with the above forecasts to refer to, you will be ready for it and know that this is typical in a year like this. Below is W.D Gann Financial timetable and his decade cycle chart.
Here is the timetable. We can see that the next two years should continue the bullish trend into 2026.
As for the decade cycle you can overlay this with 2021 up to now and see how well Gann figured this stuff out. If you look at year 4 which is what we are now in, you can see it’s really a build up year for year 5 which Gann referred to as “the year of ascension.” It also shows a low in the middle of the year and a strong rally to finish the second half.
All said, I think this is plenty of information to keep you level headed and help you invest wisely as we go through this year. There will be ups and downs and the market will be scary at times but if you refer back to this guide I believe you will be able to think with a clear head while others are panicking. Of course, we will be right there to keep you up to date and navigate the week to week emotions of it all. What I see is another year filled with opportunity so here’s to making this our best year in the markets yet.