SPX reached our 5727 IH&S target from December 2023 yesterday.  The chart from our 2024 Year Ahead Forecast from Jan 4 illustrated it best:

The timing was thrown off by the August swoon. But, SPX reached it before the US election, another key element of our 2024 forecast.

The only question, now, is how much of a slide we will experience.

continued for members…

So far, the response has been modest – about 15 points. While VIX has obviously broken down… …and USDJPY has broken out…

…the recent runup in oil and gas and threat of further geopolitical-driven increases has the bond market on edge.

The 2s10s has backed off its steepening just a bit, at 11 bps versus yesterday’s 14 bps. It can keep the rally alive with a backtest of “0” but as we discussed last week it has near-term potential to 20 bps.

We’ll almost certainly get a backtest of the SMA10 here, but the potential is to the SMA50 – currently at 5518.

Stay tuned…