The S&P, and Where It Is Heading…
In 2016 we witnessed the worst start to a year, ever.No, we aren’t talking about losing Ziggy Stardust and Professor Snape within the space of four days. Rather we are referring to the 6% drop experienced by the S&P 500 over the first five trading days of 2016. This was, and remains, the worst ever start to the index’s year (eclipsing 2011’s shoddy start).
Since the awful start we’ve seen a steady climb in the S&P, from the lows of 1,829 in February to the historic highs of around 2,400 recently.But where is the market going next? And how high could it climb in the process?
Our unique algorithms, developed over almost a decade of research and testing, hunt for infinitely repeating patterns in market data.
Bull vs Bears
One thing is for sure, the majority of analysts now believe that we could be at the end of the bull market and entering a correction phase. Although heathy growth has continued across the US indices this year, the same monumental climb is likely to be impossible next year. Instead analysts from some of the world’s most influential banks and institutions are expecting more modest gains, gains which will be still the highest recorded levels in the S&P. On average they expect a 4% rise to be on the cards.
The Lower Estimates
The Bank of America Merrill Lynch, Credit Suisse, UBS and Goldman all believe that the S&P will hit the magic mark of 2,600 in 2017, but their reasons for coming to that conclusion are different. The Bank of America Merrill Lynch believes that President Trump’s pro-growth policies will help lift the indices, but big market swings will become the norm.
Credit Suisse and UBS are both taking the Swiss approach; basically it involves a lot of cows. Well, bulls specifically. Sure it took us a while to get to that analogy, but the Swiss powerhouses of Credit Suisse and UBS both believe that there is no recession in sight, and that the bull market will continue pushing the markets higher. Credit Suisse, in addition, believes we could see a level of 2,650 mid-year.
JPMorgan and Oppenheimer are two of the highest rollers when it comes to S&P predictions next year.JPMorgan is calling it at 2,400 and Oppenheimer is going one better at 2,450. Oppenheimer are basically expecting President Trumps “stimulative fiscal agenda” to lift the markets. JPMorgan expect broadly similar, but are also mindful of the fact that a strong US dollar and higher interest rates could cap growth in the markets.
So What Does This Mean For Your Investments?
Going forward, the long-term trends of the S&P won’t tend to affect the average trader who uses short-term investments to bring a quicker return. That’s the way we work at fractalerts; holding a long position in the market for a period of up to 30 days, before flipping it to a short position, and so on.
Our unique algorithms, developed over almost a decade of research and testing, hunt for infinitely repeating patterns in market data. This information then informs when and how we trade. So regardless of where the S&P is headed in 2017, be it it to new historical highs or unpredictable lows, allow fractalerts to help you navigate your way to a profit.