Bearish Arguments Have Merit – But S&P’s Finish 2017 Higher

Today I’m going to offer up my insights on the S&P’s for the remainder of 2017….this will be pretty key.  However, be sure not to skip over this week’s ‘Must Reads & Ask Dave Highlights’…

While summer trading is a bit slower, as always, and volatility remains rather muted (to put it mildly), the fact is, despite rather logical economic, fundamental and Central Bank arguments…stocks remain poised to move higher.

While I will not suggest this is an ‘all in’ forecast, but rather a suggestion that one should position themselves for higher prices through a series of short-term term trades based on your time frame and risk tolerance.

For instance, shorter-term traders might consider trading the next leg higher up towards 2484, book profits and wait for a correction lower in Wave ii towards 2465-2443.

 

Traders more comfortable looking ahead a few weeks should consider this probable path to higher levels.

 

However, you choose to play it, be a cautious bull. There are some serious risks out there….liquidity and volatility being the big ones. Knowing when or even if those will be the catalysts is impossible.

What does seem reasonable though is that as we head into the end of the year, career risk and closing performance gaps will become paramount for so-called money managers? While it is wreckless from a fiduciary perspective, they will pile into the BIG names like FB, NFLX, GOOG and AMZN. You really cannot get fired if you own ALL the same stocks as your competitors…but god forbid you use logic and raise cash or take on a defensive posture because things seem ‘warped’.

So, my call for higher levels, while rooted in technicals, is mostly due to a game that seems unlikely to end anytime soon. Just be on the lookout for subtle warning signs.

Must Reads, Listens and Watches

  • The music industry according to super-producer Jimmy Iovine – Financial Times

He worked with Lennon, Springsteen and U2, before co-founding Beats with Dr Dre, selling it for $3bn and launching Apple Music. Matthew Garrahan meets him

Commonsensically, a more highly levered economy is more growth sensitive to using short term interest rates and a flat yield curve, which historically has coincided with the onset of a recession.

  • Illiquidity – The Cause of The Next Market Dislocation?

Ask Dave

This weeks question dealt specifically with technical analysis. Specifically, what are some resources a trader can use to get up to speed and find an approach that is right for them. 

Read Now

Enjoy and feel free to send me your questions.

Dave

 



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