Where is the ES heading to ?

December 10th, 2010, 11:37 AM

Mistake to relate ES and economy. The ES rarely reflects the economy. Reason why analysts look at forward earnings - current earnings never make sense of current pricing so it must be something else!

(don't get me started on expanding/contracting multiples

)

The 70's decade is regarded as a weak economic period (weakest in its time outside of the depression), yet the SPX put in an ultimate low in '74, and subsequent higher lows thru to 1980 when the SPX eventually broke out to new all time highs and a bull run. People were bearish throughout the 70's and 80's - just as they are now. Same could be said for the 50's but I haven't studied it as thoroughly.

I see 1250 near term, then a potential correction, but then up to 1350ish sometime next year. (then the odds of a more significant correction developing are much greater imo)
This hypothesis is not static, but at the moment I see nothing to suggest a new bear market upon us in the near term.

Big Mike

It seems the fed is determined to make corporations as profitable as possible, so I think 1250 by end of year is very easy, and if we get a QE3 and QE4 then we'll likely see 1300 and 1400 sometime next two years.

But what is sad is while corporate america is doing gangbusters, the average american is in poverty with record foreclosures and record unemployment... So, I keep thinking someone is going to wake up and the ES is going to take a nose dive to reflect the true state of our economy. But, the ES is focused on corporations and their profits, which of course are doing well, so my symbology doesn't work.

Mike

December 10th, 2010, 11:44 AM

I am definitely willing to work ES SHORT side with any new highs until year end and then in January that is a whole other ball game......new quarter and new year for equities funds.

Where is the ES heading to ?

Discussion in Emini and Emicro Index

Where is the ES heading to ?