December 27th 2013: So, what's in store for the market next year??

Answer:  How the heck would I know; I don't have a crystal ball.

Here's something that I wish someone had told me when I was younger:  most predictions for next year will be wrong.  Here's another one:  humans suffer horribly from bias.  They're biased by where they get their paycheck, they're biased by the need to predict the future, they're biased by recent history, etc., etc.  As an example, if Year 1 was up 25%, your friend the stock broker from big bank brokerage A will jump on TV and predict Year 2 will be up 10-15% based on X,Y, Z logical and usually fundamental arguments.  Similarly, the guy from the bear shop will say stocks are going to crash.  Every year, he'll say the same foolish thing and he'll be right 1 or 2 years out of 10.  The guy from the bond shop will say to buy bonds for the long-term to reduce volatility in your portfolio.  You can watch them on mute and fill in the words yourself because on average they'll all say the same thing depending on their individual biases, employers, and current portfolio position.

Anyway, my main point was not to rip on talking heads on TV....

I think it's much more valuable to talk about possibilities for 2014.  There's an important distinction between possibilities and predictions.  Possibilities offer a potential road map.  Predictions are an imperfect attempt at defining the future.  The key distinction for me is that the charts will tell me if I'm on the wrong potential path and I can get the heck out of the way.

Here's some possibilities for 2014 (and a brief rationale):
- $SPX:$USB ratio tags its 1999-2000 high of ~16.  (Trend is in place and can hit top of prior range - especially if money flows out of bonds and into stocks).
- $COPPER gets a bid after 3 years of neglect and runs up to the top of its range @ $4.50 per pound.  (Some nice bullish divergences showing on the monthly RSI(2) chart.)
- $XJY (japanese yen) continues to slide against major currencies until it finds support in the low 80's.  (Breaking down below $96 and trend is in place).
- $GOLD (& $SILVER) experience a vicious short-covering rally.  ($SILVER is finally outperforming $GOLD and historically, that's been a clue that prices can rip higher.)
- $TYX (30-year bond yield) hits 4.5%.  (Trend is in place and can hit top of prior range).
- $WTIC continues sideways between $115 and $75.  (Competing RSI(2) monthly chart divergences suggest range bound trade for now).
- $NATGAS surprises to the upside despite reports of large supply.  (Cup and handle target is close to old resistance at $6.11).
- Industrials, XLI, (led by shippers: SEA) outperform the $SPX in 2014.  (Trend is already in place for XLI, shippers could add more fuel.)
- Metals (XME, SLX) are surprise leaders for 2014 and play catch up to the rest of the materials sector.  (Monthly charts look bullish for the first time in 3 years).
- $VIX remains trapped in the 10-20 range.  Brief forays above 20 will be buying opportunities for equities.  (Monthly $VIX chart looks bearish to flat.)

So those are some of things that I'll be watching for in 2014.  IF the right set-up comes along, I'll be jumping on a few of these.  Good luck to all!