J.D. DURKIN: Good morning, subscribers. Carley Garner joins me now for a look at futures and commodities as we approach the end of 2023. Carley, thank you for being here. Somehow it's already the end of the calendar year. Of course, we do need to start off a conversation with this week's trading. Now that we do have the jobs report data and other key economic data safely in hand, Carley, where are you putting your attention?

CARLEY GARNER: To be honest, this time of year, I try to focus on not overanalyzing anything, just taking a step back, taking it easy, resetting my mindset because the period between Thanksgiving and December and Christmas and even into New Year's is generally fraught with light trading volume, it tends to expose the pain trades. So a lot of the price action that we're seeing now has nothing to do with fundamentals, it's more a product of light volume, small business pension funds putting money in, of individual investors making tax transactions. So there's a little bit chaotic and weird things happen. So we try to lay low and focus on getting everything ready to go for the next year.

J.D. DURKIN: Of course, Carley, tis the season for tinsel as well as targets in the S&P 500 for the new year. What is your take on Wall Street projections in general, and more importantly, do you have a projection for what you think the new year will bring?

CARLEY GARNER: Well, it's very difficult to predict what's going to happen in the next week or month, let alone what's going to happen by the end of 2024. So I'm going to leave that to them. But I do have some ideas. If we're talking about in the next handful of weeks for 2023, I still believe that my projection of 4,730 is in play.

And I come up with this using technical analysis. The top of the trading channels that we've been decisively in, in addition to upward seasonals tells me that we're probably headed for 4,730 here in the next couple of weeks. But I think we most likely will be a little top-heavy at those levels. And so I would expect some sort of pullback once we get into deep January, and that pullback could be as low as 4,300 in the S&P, maybe 4,400, somewhere in that ballpark. So you want to be prepared. Markets don't go straight up or straight down.

That said, if interest rates remain stable and the dollar continues lower, as I expect it to, I think overall, by some point next year, we're probably looking at somewhere around 5,200 in the S&P. So I'm pretty optimistic.

J.D. DURKIN: All right. All right, fair enough. I think we'll take that. Our members will certainly take that into consideration. Let's talk about two commodities that Wall Street simply cannot seem to get enough of, we'll kick off the conversation there with gold. Did hit a record high on Monday, Carley, what does the timing of that surge higher tell you about the market as well as the broader economy?

CARLEY GARNER: It was really unfortunate to see the way gold reached a new all-time high on a Sunday night at pre-market while most-- the stock market was closed obviously. Most people weren't trading. It was on light volume. And although gold was up $50 when I went to bed, by the time I woke up the next morning, it was down $50. So that's not something you want to see as a technician. And technically, that was a key reversal, and it's normally bearish.

I do think we might get a little selling in the short run, maybe some follow-through selling but seasonality tends to be bullish starting in late December in gold. So I have faith that we'll probably hold support somewhere between $2,000 and $1,930, and then might-- we should start making our way higher.

The thing is, the gold traders have been-- basically, they've been trained to sell rallies into $2,000, $2,100 because it's worked since we saw $2,000 the first time in 2011 and it sold off sharply from there, and it took a decade to get back. And since then, we've been seeing rallies to those levels just aggressively sold into. But the market's been knocking on that door for a long time and I think we break through in 2024 is my best guess. So be prepared, but in the meantime, we probably get a little more back-end filling.

J.D. DURKIN: All right, fair enough. Let's turn our attention now on over to oil, a lot of words there that begin with O's, pardon me. Chris added to XLE, that's the club's energy ETF. He did so just yesterday. Taking a look at crude by itself, where do you see it headed?

CARLEY GARNER: Crude oil has been, obviously, an interesting market, it's threw a lot of people off their game here in the last year or so. My best guess is we find we're in the process of putting in some sort of bottom in oil. My original target was about $68 in oil. Yesterday's low was in the vicinity, it didn't quite make it. But that might have been enough to justify starting to turn bullish.

The seasonal low in oil is usually the second or third week in December. So we're right there chart-wise and seasonality-wise. And at some point, the OPEC production cuts and some of the Middle East drama will come back into play, and the headlines will start pushing us higher.

J.D. DURKIN: Yeah, Brent, we're currently about $75 and change, certainly off its highs that we saw earlier this year. October we saw these numbers for WTI, and Brent hit $90 and change, would you be a buyer here I wonder?

CARLEY GARNER: I'm turning bullish, yes. I really wish we would have saw just a little bit lower on yesterday's sell-off because it would have made me more comfortable. What I've been hoping for is to wipe out the sell stops beneath the market, and that would require us to get to about $68 or a little below.

Also, I pay attention to the COT report, which is a government report that tells us who's short, who's long, and by what degree. And we probably needed to see $67, $68 to wipe out all the longs. And I hate to use the word wipe out, that's kind of an insensitive term but unfortunately, that's how markets work. So once all those longs get liquidated then it opens the door for fresh buyers and rallies.

So I'm kind of on the fence, maybe it's a 50/50 shot whether we saw that yesterday or we need to have one more new low to do it. But in the big picture, I think the high $60s is a really great place to consider playing the upside.

J.D. DURKIN: So Carley, all of our subscribers, anyone who sees this interview is a consumer of gas, anyone who sees the interview also probably charts these benchmarks, WTI as well as Brent. Can you help us better understand what the relationship is between the benchmarks and the actual oil-- the actual gas prices rather that all of us are familiar with as we drive by the pumps and we see these numbers go up and down in our hometowns and neighborhoods?

CARLEY GARNER: There's a really good reason that consumers and the media like us follow oil prices, and it's because gasoline and oil are correlated about 95-ish percent of the time, it goes up or down a little, but they're very highly correlated. They don't always feel correlated because gas prices at the pump tend to lag oil prices, or at least on the way down they do.

And some people call this price gouging but the reality is the energy markets are extremely volatile and end users have to understand that gas stations and everywhere up the supply chain, they're purchasing product in advance. So they can't lower their prices immediately and sell what they've already bought at one price for a loss just because futures on the NYMEX is trading lower today. It's not really how it works. So there's a bit of a lag. And that, as a consumer, that's unfortunate but it is what it is. So unfortunately, I think the odds are gas prices probably get a bit of a bump as we go into the early part of next year.

J.D. DURKIN: I know you're not alone in that sentiment. We'll see what 2024 holds at least for the next few months. Before we leave it for today, I wonder, is there anything else on the Carley Garner watch list that you and I did not get to talk about just yet?

CARLEY GARNER: Well, I doubt many of your followers are watching the live cattle futures market but just in case anybody is, live cattle tends to bottom out in mid-December, so we're right there. And if you've been watching, the cattle market has wiped out all of the gains from 2023. So we're sitting right back where we started at the beginning of last year and that should be pretty good technical support as well. So we're advising our speculative brokerage clients to start playing the upside using some aggressive option spreads.

J.D. DURKIN: I always know it's a great interview when you give me and our subscribers something to go off and research that we had not otherwise been thinking of. That's an awesome, awesome play to keep in mind.

Another great conversation. Thank you, as always for stopping by, Carley. And thanks for waking up early. I appreciate you being here.

CARLEY GARNER: Thanks. Thanks, J.D.

J.D. DURKIN: Of course. As a final programming note, subscribers, our next monthly call will be live on Wednesday the 13th of December. It's also Fed day for those of you keeping score at home. The AAP team will be revisiting the highs and lows of 2023 and getting you ready for the new year ahead with some of their biggest 2024 predictions. Until then, Chris Versace and I will be back on Monday morning, bright and early to get ready for another busy trading week ahead. Until then, have a great weekend, and we'll see you again soon.