If you were a reader of this blog last summer, you would have made a cool 25% in six months. It has been a good run.......but technically, the run appears to be nearing an end for a while.
Technically, we have hit the major resistances at 1150 on the S+P. The market is oversold and looks like the classic rolling-over pattern. See the chart, courtesy of StockCharts.com.
The federal government has not given us the catalyst for further growth, which is not going to happen with this Congress and President. Sadly, with all the unprecedented spending, taxes are going to go up. The Taxman will be coming after your money soon.
If I am wrong and tax increases are not imposed, there still is no catalyst to propel the US economy to any sustainable growth. I believe the likelihood of that is slim. (We need significant, permanent tax cuts to make that happen, the likelihood of this is even slimmer!)
Unfortunately, the next target for the S+P appears to be to about the 1050-1100 range say by mid year. That is a 4-9% drop from here.
If there is some game changing news to alter the course of the direction of the S+P, I will follow up this post with a revised target. Until then, expect a correction and it may happen soon and somewhat quick............then we become range bound until at least May.