The Texags 24 in 24
The list is coming along, but I first have to caution.. this will likely not be a list of stocks to hold for the entire year. 2024 is shaping up to be extremely volatile. While the last two months have you all looking up, I want to caution that where we're at is concerning in many ways.
First, we are way past due a sizeable pullback. While I am fully expecting one, the size and length (and exact timing of it starting) is hard to try and predict due to outlook on rates and SO MANY stocks that have lagged way behind.
Second, no matter what happens in the first half of the year, or even first 3 quarters, we have an election coming up. Throw everything you think you know about market performance in election years out the window. Because to me, what we are experiencing feels a lot like 1999. In fact, go look at the shape of the correction in July of 1999 that ended in October 1999, and the move that followed it into the end of the year. While it had a couple small breathers, it looks a little familiar. What followed was a beginning of the year drop that kind of mimicked the October 1999 drop followed by a robust blowoff top into March 2000. You then had a lethal drop back to the previous low, a choppy attempt to reclaim lost ground nearly getting back to the top, and finally, a bull destroying selloff into a two-year long bear market starting the September before the election.
On top of that, go back and look at all times that the FED starting lowering rates after a hiking cycle. These things rarely happen with stocks going up. In fact, it's usually when the FED starts lowering that they are merely following the bond market who was many months ahead of them, and has already bottomed out and reversed. By then, it's usually too late and the FED is merely lowering into, and worsening, a long selloff. It's only after the equities markets exhaust themselves and create capitulation that they will finally bottom. And most people and financial advisors will be looking even lower when it does. It's hard not to. But the market will bottom and likely start a lengthy multi-year bear market bounce until the next event. And just like all other major declines that include deflation in everything, the FED will of course have no choice but to pull their last lever.
See, while the FED has been selling it's assets (on the surface - as I discussed last weekend they've actually been providing record and unprecedented amounts of liquidity through the reverse repo market, a power not granted to them until the Great Recession). When everything in the country is dropping in value, they really only have one tool left, and its not a rescue tool. It's literally the reason they exist. They will print more greenbacks and devalue the currency again, crushing the middle class, in an attempt to rescue the banks - the industry they were designed to protect. This will provide liquidity for the banks to survive and consolidate. And they will buy your assets for pennies on the dollar while you are looking down. Many banks will fail and many more will be bought by the monster banks. This is the gameplan since the beginning of the FED. This is how they consolidate power and wealth in the few hands at your expense. And the government, their partner, has been more than happy to grant them these powers, help them grow them, and add insult to injury along the way through excessive and unreconcilable spending.
In the case of 2000, that next event was the Great Recession, only 5 years after the dotcom bottom. So if this all shapes up the way I've described, you can bet your ass the late 2020's or early 2030's will be even worse.
I say all this to provide a backdrop for why I'm hesitant to hold stocks all year. Some will boom and some will do nothing. But in the end, in the face of a potential cyclic event, one that has happened regularly for the last 100+ years despite the FED apparently being charged to prevent them (they cause them and make them worse), one that is absolutely due, and being within an economic climate that is over-ripe for that type of event, nothing will be safe. So the plays I outline for this list will have targets, and upon being hit, I recommend exiting completely. And if at any point things start to get shakey, I absolutely recommend advising your own level of caution. Who knows if I, or anyone, will see anything coming.
The list will have 24 stocks, all with target entries (some will say enter before end of the year), all with minimum targets and maximum targets. I will also try and provide stop levels. Some of these will seem obvious. Some will not. I'm still working on rounding it out. Every day I research I find more potentials and drop some out. But here's 3 that will absolutely be on the list that you can start watching. The rest will be out soon.
OXY - We all know Buffet's interest. But look at the chart. This thing is consolidating sideways while he buys in. While it wouldn't shock me to see $50. It also wouldn't shock me to never see $60 again. The minimum target is $110. Caution will need to be taken at the previous high around $77 and then again at $87 and $100. The stop would be $45. So some risk here. But this a great company. Oil has either just bottomed or has one more low. I could pick a ton of oil stocks. But OXY is reliable.
SMCI - This comes with the assistance of our faithful degenerate ProgN. I've been VERY bearish on it seeing the $170 area gap fill as likely. He liked the upper gap fill and was ultimately right short term. I fear now that I might be right going forward. This play comes with a caveat. IF it gap fills to $170, you absolutely buy the bottom as once it finds support it will retrace up significantly. Many of you are already in it.
AMD - Whether it corrects first or not, this one is going to cement itself as a chip leader. The target is minimum of $230. It could go as high as $350. Earnings in February might be a catalyst. The caveat here is, this cannot sell off below $80 early next year. If that happens, the timeline gets extended and the big move is likely a year or two further down the road. We're pretty frothy right now. I'd like a better entry and for technical indicators to come more into balance. But who knows.
One last comment - I'm very bullish metals. But I'm going to not include them. I think you should be loading up after the next mini selloff (if it comes). Metals, miners, and maybe BTC. But I'm so bullish on all of those, it's hard to pick a handful of best performers.
Stay tuned for more.
