Outlook 2021: What To Expect From Equities, Bitcoin And The U.S. Dollar

 | Dec 29, 2020 04:48PM ET

By Caroline Gerber

2020 has been a year to remember. It’s probably safe to say the highs were higher, the lows much lower. In February equities markets edged toward new records, only to collapse in mid-March as the coronavirus outbreak that was first detected in Asia at the beginning of the year became a global pandemic.

As COVID-19 circled the globe, the fallout has been widespread—regional economies decimated and the human toll tragic: 82 million cases and over 1.77 million fatalities at time of writing. Businesses were shuttered and travel halted.

But the dramatic bear market in March, when the S&P 500 dropped 30% in just a few days—the fastest decline on record—then flipped into an uptrend that boosted markets to new highs by August. Of course, governments around the world had a big hand in the advances, which were aided by economic stimulus measures and lower-for-longer interest rates to soften the blow.

As the year wound down, two coronavirus vaccines were brought to market in record time, providing a ray of hope. In November the US elected its first female Vice President, Kamala Harris, as well as her presidential running mate, Joe Biden, sending Donald Trump packing despite his ongoing protestations.

Other events of note in 2020: Oil tanked and then recovered; Bitcoin finally returned to the forefront and is currently hitting a string of new records, shooting over $28K on Dec. 27. The UK-EU divorce drama finally reached an accord both sides can live with and a Brexit deal was signed right before Christmas.

After such a record-defying year what can markets expect for 2021?

We asked some of our most popular contributors to weigh in. Below are four perspectives on where markets are heading, covering equities, Bitcoin and the greenback.

Tomorrow, Wednesday, we’ll publish part II of our Outlook 2021 post, here. We'll dig deeper into where commodities and bonds are headed and present additional views on the dollar and Bitcoin.

here ), among others. Thus, if you time your entries and exits reasonably well, 2021 can provide excellent opportunities on the long- and short side of the trade.

Bitcoin, which has already gained over 400% just this year, should continue to do well. After such high gains this year alone, a sell recommendation would seem more likely, but triple-digit-gains are the norm and not the exception for cryptocurrencies. Based on my Elliott Wave Principle count and other analyses, if this instrument can stay above $14K on a monthly closing basis it can reach the mid-to-high 20-thousands (black arrows) before a more sizeable correction, think 2019, will happen.