Earnings growth of 8.5% puts an S&P target for the year of 1350 and does not justify a 12% jump for SPX this year, now at 1402.50. This is not 2004 and 2005. There are some very compelling stories, such as MSFT, but this market is only pricing in perfection. Be careful.
The index that is the most at risk is the DOW.
The short term concern bears should have is that last year we pulled back right before Thanksgiving, then rallied up to mid-December. Since this entire year has been trading in opposite fashion from last year, they could keep propping up the market until 11/30. It's impossible to tell, so trade it day by day. It's really a question of how long can the markets go up on mergers alone while we are seeing so-so earnings and even key warnings.
The index that is the most at risk is the DOW.
The short term concern bears should have is that last year we pulled back right before Thanksgiving, then rallied up to mid-December. Since this entire year has been trading in opposite fashion from last year, they could keep propping up the market until 11/30. It's impossible to tell, so trade it day by day. It's really a question of how long can the markets go up on mergers alone while we are seeing so-so earnings and even key warnings.
This entry was posted
on Monday, November 20, 2006 at 11/20/2006 12:47:00 PM.
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