Wrapping Up With a Happy New Year

Okay, so it's a bit early. But when it comes to the markets, 2022 pretty much ended yesterday, Friday, December 30th. And as we do every month, we reviewed what we consider somewhat meaningful results and ratios for the month.

Frankly, there was nothing that jumped out all that dramatically. But there were a couple of items that were of note:

Gold, and much of the Precious Metals Universe did OK not only last month, but the whole year. Nothing all that great, but better than just about everything else.

The USD does seem to be flagging after a strong bull run. We'd buy an inverse as one of our Brain Trust recommends but one of our other Brain Trust gents sees the USD bottoming in January. So our thoughts are that it's not worth putting our hard-earned money into the inverse at this point. 

Oh, and our treasuries held up nicely, both protecting us from the stock Bear and giving us a little splash of gain as well. (And by little we mean very little.)

So with best wishes for the New Year, here's the summary of our Notes, for those interested:

Important Indicators (as of 12/31/22)

-   Advance-Decline Line: Mirrors S&P – Down from last month

-   Fed Funds Target Rate – Below 10-year bearish (4.50 vs. 3.88) – No.

-   10-year minus 2-year TSY negative?: No (3.88 – 4.41 = -0.53) – Yes - Inverted

-   10-year minus 3-mo TSY negative?: No (3.88– 4.42. = -0.64) – Yes - Inverted

-   Russel 2000 Index (IWM): Mirrors S&P

-   DT Industrials/Transports: Transports mirror Industrials

-   S&P 500 (SPY) vs. Financial Select Sector SPDR Fund (XLF): mirrors SPY DOWN.

-   S&P 500 (SPY) vs. S&P Equal Weight (RSP): Mirrors S&P – SOWN - No divergence

-   S&P 500 (SPY) vs. Value Line Geometric Index (VALUG): VALUG a broader index than S&P or Dow. Mirrors S&P DOWN

-   Hi-Yield Credit Spread – 4.81 UP from 4.63 - Spread between below-investment grade bonds and similar duration Treasuries: When high, indicates increasing defaults. Has been trending up.

-   Shiller PE/10 – 28.09 – DOWN from 29.90 – still historically high (even after the quick, steep fall in stock prices, it remained elevated). [This Index highest value as long-term indicator of initial level or withdrawals (% TAV) for Retirement Investments: Higher P/Es indicate lower withdrawal % and vice-versa. Less value as guide to stock allocations shorter-term.]

- Gold Futures: In contango

As far as our results for the year, on a relative basis, we did OK. But we did lose money. When we become geniuses, or figure out how to always make money, we'll let you know. Scratch that. If we really did find the Rosetta Stone of investment success the wise thing would be to just keep it to ourselves. 

Still, our best wishes are extended sincerely. Really.