The S&P500 hit a fresh record high yesterday. It happened quicker than even I expected. And this market continues to fly in the face of all the negativity. Which means this market has plenty of upside left before all those bears, who have been calling for impending market calamity year after year, will finally be right.
I've had my theory as to when this market will finally fall. And I think there will be time to hide in your fallout shelter before we do get that 30-40% pull back for equities. And it will be another great opportunity to trade for downside, just like 2008 and early 2009. Until that time comes fighting the FED and the Central Banks remains futile.
Just because we have a bullish bias doesn't mean we agree with Central Bank policy, or the fact that good honest savers have been bent over the barrels the last 12 years. It just means we want to be on the winning team.
And the bulls have been winning 10 years and counting. It's called a trend.
As we come into another FED day tomorrow, the S&P500 is coming up against resistance.
Momentum remains up, although requires a careful eye as we near a possible short term sell signal if action slows. The FED meeting tomorrow could give that trigger. As such, absent an even more dovish outlook from the FED, the risk for market disappointment is high in my opinion, meaning tomorrow carries some downside risk.
I think $SPY 294 would be the low for any pull back over the short to medium term, with $297 the first line in the sand. From either of these price points, I think the $SPY closes at another fresh new all time record high later this year with prices over $305 as we get closer to Christmas.
And next year... gasp.... $320 on the $SPY? Really? We have yet to see the euphoria stage of this market. I think we have a good chance of seeing that next year as the FED's 'NOT QE' and the 3+ rate cuts fuel some positive market action next year.
But what do I know.
Maybe the bears calling for a crash in 2010,2011,2012,2013,2014,2015,2016,2017,2018,2019 will finally get it right in 2020.