As I look forward into 2021, I want to paint a broad picture of what to look for directionally, as well as key turning points to be aware of. I will focus on the two main trades I am most excited about, SPX and crude oil. As we examine the below charts and analogs, consider them as a rough guide, using crayon not pencil.
SPX Forecast
Let’s begin by taking a look at the broader market via SPX. To gain a big picture forecast view of SPX I prefer to utilize the 10 year crude oil to SPX analog. This analog was discovered by Tom McClellan, and looks back to see what crude oil was doing ten years ago to give us a glimpse of what to expect with the broader market now. A note on this analog, and the other analogs I will discuss in this post; they will look to show you direction and key turning points to be on the lookout for. They do not reflect the magnitude of the move to expect.