Earlier this week, I spelled out three possible scenarios for stocks with one very bullish, one mildly bullish and one bearish. I gave most weight to the mildly bullish one and least weight to the bearish one. Right now, stocks are marching more towards the very bullish scenario although the Dow breached the lows I had discussed in the mildly bullish scenario.
Looking at the five major indices, the Dow needs to close above 17,850 to set up a run to new highs and break the backs of the bears. The S&P 500’s number is 2065 while the S&P 400 is hitting fresh all-time highs as I type this. The Russell 2000 is already above its line in the sand and just needs to close well to stomp on the bears. Finally, the Nasdaq 100’s number is 4295, still more than 1% away and playing catch up.
Unless the major indices immediately reverse, and there is the employment report on Friday, the bulls should have enough juice to push higher with most indices scoring all-time highs this month.
Anything to worry about? With the bull market being 71 months old and more than 3 years without a full fledged correction, risk is there. The three key sectors, semis, banks and transports are not leading and don’t look powerfully constructive. Defense remains in charge, not exactly a ringing endorsement.
However, if the Dow sees 5 straight closes above 18,000, that will set up 20,000 as the next target in 2015.
Paul Schatz is President and Chief Investment Officer of Heritage Capital, LLC, in Woodbridge, CT. and a Managing Partner at Numetrix Capital, an investment research firm focused on multi-manager, multi-strategy portfolio solutions.
Editor’s Note: Be sure to check out Paul’s Blog: Invest For Tomorrow
The opinions and forecasts expressed herein are those of Mr. Paul Schatz and may not actually come to pass. Mr. Schatz’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report is for informational purposes only. No part of the material presented in this report is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program.
Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.
The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
Paul Schatz, an advisor representative of CONCERT Wealth Management Inc. (CONCERT), is founder of Heritage Capital LLC, a legal business entity(Heritage). Advisory services are offered through CONCERT Wealth Management, Inc., an SEC registered investment advisor. For a complete description of investment risks, fees and services review the CONCERT firm brochure (ADV Part 2) which is available from your Investment Representative or by contacting Heritage or CONCERT.
Heritage Capital a state-registered investment adviser. Heritage also serves as a sub-advisor to other investment advisory firms. Neither Heritage or CONCERT is registered as a broker-dealer.
Employees and affiliates of Heritage may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or Heritage has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.
Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.