timwest

S&P500 INDEX -WEEKLY/ANNUAL BOX -HISTORICAL ANNUAL RANGE

INDEX:SPX   S&P 500 Index
384 7 10
2001-2013 RANGES are pasted onto the current market level to show what the market has done in the past 13 years.

You can see where the market has gone relative to where the forecasts are for 2015.

If we get a red-year, it looks like a touch under 1700 is possible.

Tim 9:45AM EST 12/3/2014
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kilo1romeo
2 years ago
So, Tim, how many trading assistants do you have? j/k
+1 Reply
timwest PRO kilo1romeo
2 years ago
Thank you - very nice of you.
Reply
kilo1romeo
2 years ago
You're work is exceptional. Many thanks.
+1 Reply
tompower
2 years ago
hey Zeus, that's another 300 handles north, that's a lot of heat to take if you're short.
Reply
mazdaki PRO
2 years ago
Tim, Based on previous posts, I believe that you think that we are at the top here.
On what basis do you expect a red year?
With sufficient oil in the US and low energy costs, I believe the US economy should be able to make significant gains as long as dollar stays stable.
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timwest PRO mazdaki
2 years ago
Thanks for the question @mazdaki - There are a host of reasons to expect a red year. By year end I'll compile my list and post it here. I've done this every year. There are a list of negatives and list of positives.
The bullish and bearish factors that drive the US Stock Market:
Bullish:
1. Bullish as Foreign Investors flooding into the US Dollar (Negative rates in Europe driving Euros into Dollars to buy US Treasury Obligations)
2. Central Bank easing globally (especially BOJ buying equities to drive up stock prices in Japan)
3. Fed Tapering didn’t hurt stock prices
4. Low Oil Prices and low inflation globally due to low capacity utilization
5. Companies buying back shares - (Example: The S&P500 has 95% of profits going towards buying back stock last year)
6. High cash balances in corporations and very high and rising debt levels at low interest rates.

Bearish:
1. Strong US Dollar weakens earnings from overseas operations. S&P500 has over 50% of earnings from outside US, therefore it will be a drag on earnings with the 10% gain in the dollar.
2. Margin Accounts are the most extreme level of bullish sentiment in 40 years of data = extreme caution
3. Volatility is at extremely low levels revealing complacency by US Investors and a high level of economic certainty.
4. China’s engineered economy has been weakening and revealing a potential credit bubble.
5. Junk bonds are on their lows and pointing to smart money selling and that debt is building up at unsustainable rates.
6. Earnings are at high multiples relative to very low interest rates. If rates go up, P/E ratios will fall.
7. Stock buybacks are now greater than earnings in the last quarter, the first time since 2009.
....
more to follow...
This isn't a complete list, just what is on top of my mind right now.
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timwest PRO timwest
2 years ago
So, I would look for a rising market for a little while longer as the last of the foreign buyers pile into the US Market ... then after a minor new high in the new year, we drift down as the economy if flattish and the risk of a debt bubble tempers enthusiasm. The S&P peaks in the first quarter and then slides to a negative year and breaks under 1700 (down 15%) at some point in the 2nd-3rd-4th quarter.
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