Don't know if Mr. Kass is right with his projection ,but here are the six risks to the economy that he identified recently:
- the price of oil
- broadening geopolitical risk in the Middle East;
- a slowdown in the emerging markets (especially in China and India);
- the continued reliance on monetary policy (and neglect of pro-growth fiscal policy);
- an unrealistic U.S. budget that is dependent upon assumptions that would embarrass even the tooth fairy.
- the changing political backdrop, which now favors an incumbent presidential win.
Right now, it's seems the SPY is testing its support, which was 2011 highs(137.18). I will remain bullish if it trades at around that level. If 137 is broken however, I might consider closing my open positions.
Let's not forget that Earning season has started and this will affect the direction of the market. Also "summer" is around the corner, will traders "Sell in May and go away" ?
As per the publisher of this chart, Doug Kass, he 's long YHOO, MSFT, IFF, CSX, BTU and BRK.B.