2023 Stock Market Predictions and Forecasts

It is that time of year when everyone makes their predictions for next year that serve as comedy once a few months roll by. Market Watch and others have put together lists of the S&P 500 targets for 2023. Perma-bull Sovall at CFRA is on top at 4575 for the S&P 500. Perma-bull Binky at DB is right there with him at 4.5K for the SPX. Another perma-bull, Stoltzfus at Oppenheimer, professes 4.4K next year. That is a trio of blind-faith bulls.

Golub at CS is at 4050 and Kostin at the vampire squid, GS, is 4K on the dot. Mike Wilson of Morgan Stanley has the hot hand this year doing a good job at forecasting the numbers and he is at 3900 for next year's SPX target. Market Watch's average is 4031 for the next year. The CNBC average is 4140. The Yahoo average is 4042.

CFRA 4575
DB 4500
Oppenheimer 4400
WFC 4300-4500
BMO 4300
Scotiabank 4225
Jefferies 4200
JPM 4200
Reuters (average) 4200
Evercore ISI 4150
CNBC (average) 4140
Cantor Fitzgerald 4100
RBC Capital Markets 4100
CS 4050
Yahoo (average) 4042
Market Watch (average) 4031
Bloomberg (average) 4009
BAC 4000
GS 4000
HSBC 4000
C 3900
MS 3900
UBS 3900
Capital Economics 3800
BCS 3675-3725
SocGen 3650-3800
BNP Paribas 3400
The Keystone Speculator 2800

The bottom names on the list likely represent a mindset of European negativity in store for 2023. Keystone is down in the basement by himself. The SPX is currently trading at 3809 on Thursday, 12/22/22, in the midst of a sell-off, perhaps the final flush lower for stocks and a wash-out. 3809 would be a PE of 17.5 and earnings at 218. Or 16.5 and 230, or 19 and 200. Earnings were at 230 this year so it is a matter of how far you expect the number to retreat.

If earnings are around 215 in 2023 and a 17.5 multiple that is 3760 the bottom of the list. Picking the 4000 target, that would be say, 210 earnings and a 19 PE.

The SPX monthly chart is useful for long-term forecasting and the weak and bleak MACD line wants to see another lower low in price below 3600 probably in early 2023.

In the shorter-term, however, the negative sentiment is off the charts. All the bulls left town to end the year. Investment houses are likely ditching positions to start the year with a better balance sheet that is set-up to provide a positive return in 2023. If you sh*t the bed as a money manager in 2022, and most did, you may as well throw all the garbage out now and clean house.

The stock market is set up for a big rally to begin the year due to the overwhelming bearish sentiment. There are no bulls remaining to buy stocks. Everyone is bearish including the Uber guy and shoeshine boy (that used to be a programmer).

With the new money to begin the year, and optimism as Baby New Year arrives, there may be a January rally ahead but the monthly chart wants that lower low probably in February or March. The stock market has the look of choppy slop for Q1 and Q2.

Keystone's negativity for next year is seated in the gross misalignment of assets over the last 13 years. The four central bank horseman of the coming financial apocalypse, the BOJ (Japan), ECB (Europe), PBOC (China) and the Fed (USA), riding in on the pale green horse, have destroyed the world's financial system and all that can be done now is watching it fall apart. Break the seals and sound the 7 Trumpets!

The SPX is in the same crash profile as the 1929 crash although the descent in the stock market was much faster back then. It is 5 waves down. The first wave down off the top, then a recoil back up for number 2 (now), then the third wave down, the big one, that will occur during the middle of the year and late 2023, then another recovery wave for 4 and then a final fall to earth for wave 5 probably occurring in 2024. People will be in disbelief of what happens to their lives and savings. Good luck to you.

The bottom in 2023 will likely hit in the back-half of 2023 way down there around SPX 2000. Wha, wha, wha......  whaaattt! If that is wave 3, we may be in a wave 4 recovery move going into 2024 and then the final leg down in 2024. Well, that would make Keystone the Grinch for 2023.

Putting some numbers on the forecast, let's say a move higher in the S&P 500, the SPX, the United States stock market, from current levels to 4250 in January. Then a roll-over dropping like a rock to 3600 to test the 2022 lows, say in the February through April period. There may be choppy slop through 3250-3800 during March through July but then from August on it is all downhill tragedy wave 3 behavior. The path ahead depends on if there is a further collapse in crypto now and if it starts taking down larger players.

Whittling down the call, Keystone says a rally to 4250 in January then down to 3600 by March, then sideways chop through 3250-3800 into July, then a leap off the cliff from August forward dropping below 2000 in October then a year-end recovery to 2800. Then, in 2024, more weakness. Keystone just ruined my Christmas.

The US housing recession started a couple days ago as per Keystone's proprietary indicator. 

There is no reason to guess at the year ahead since, as a chartist and technical analyst, you can simply chart it as you go and predict the path forward with accuracy, but it is fun nonetheless to go through the mental exercise.