I expect a minimum of a 4-6% pullback sometime in early 2020 with a 10% pullback to around 3028 not out-of-the-question.
Once we move past a 2020 short, there should be some stabilization with overall decent growth in the markets as I have been saying for the past few months. However, looking at the market on a technical and fundamental level, I begin to get very worried once we enter 2021 - that is a topic for future discussion.
My Top 2020 Sector Picks for Larger Gains (15-20%+)
- Canadian Energy ( ENB , TRP , CNQ , SU)
- Precious Metals ( Gold , Silver , Platinum)
- Palladium will continue to have a good year but not as strong as 2019
Other Sectors for Moderate Gains (5-10%+)
- US Technology (including Apple )
- Renewable Utilities
- Select Financials (top banks only)
Top Trends of 2020
- No recession
- 5 to 10% pullback sometime in Q1 2020
- SPX to near 4000 by the very END of 2020
- will have a stellar year
- Crude will remain elevated for most-to-all of 2020
- Strong weakness in the DXY
- 2 US rate-cuts with significant through 2020
- Continued weakness in the US economy resurfacing by mid 2020
- A few Cannabis stocks will rebound - but not the entire sector. IIPR is my top pick for a strong rebound
Looking for a continued short into early 2020 with at-least a 4-5% pullback from whatever the 2019 year-end close is. Reasonable to expect 6-7% and even a slight chance of as much as 10%.
Some "experts" claim a 20% pullback is possible, but without a significant catalyst like the trade deal falling through, I highly doubt we would see a 20% pullback.
Generally, I would say a 4-7% pullback is almost inevitable.
With RSI's for the year virtually at the most overbought levels in the past 20 years (at one point the nasdaq was near 85-86) there is no point buying into this market.
Canadian Energy is an exceptionally good value right now (Suncor, Canadian Natural Res., and Enbridge are my favourites) - trading below 1.5 book and below 12 P/E. Enbridge is also hiking their dividend by 9.6% by March 2020.
Other then Canadian Energy you can look into Precious Metals for a strong run in 2020. NOTE: Canadian Energy will far OUTPACE American Energy.
Other than these two sectors you want to wait for at-least a hefty pullback as I noted above before entering otherwise your capital appreciation will be hindered in 2020 significantly.