What Can Possibly Go Wrong?

Posted by on February 14, 2017 12:55 am
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We don’t have to look further than January/February of 2016 lows to see the contrast.

At 2016 lows no one was bullish. Everyone was downright depressed. With a growing number of analyst calling for an all out crash.

Did the fundamentals changes since then?

Not really. Revenues and earnings are just about where they were a year ago. The stock market is up based on Trump’s “Hope” or “Phenomenal Tax Plan” that may or may not materialize.

What did change?

Investor psychology or sentiment. Just take a look at some of the quotes from today.

It may have taken the S&P 500 17 years to crawl from 1,000 points to 2,000, but investors will not have to wait that long for the next millenary milestone — that is, if one analyst’s rosy view of the market pans out.

Stephen Suttmeier, technical research analyst at Bank of America Merrill Lynch, predicted the S&P 500 will rally to 2,445-2,460 by July on its way to 3,000 by 2019, and then hit 5,000 by 2024.

“The secular bull market roadmap says that the best days are ahead,” said Suttmeier in a note distributed on Monday. “We believe that 2017 is the year of acceptance for the secular bull trend that began on the April 2013 upside breakout.”

The analyst asserts that the current bull market is still at an early stage with at least a decade to go, given its similar trajectory to the multiyear rallies witnessed during the 1950s and the 1980s, a view shared by Andrew Adams at Raymond James.

In other words, to infinity and beyond.

I would suggest that investors treat the above sentiment as a red flag, not as some sort of a market gospel.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here.