This will be my last prediction for the summer of 2010. So far, I am batting almost 1000 and close to being wrong every time. Perhaps if I predict a lower market, I will put a jinx on the market and it will go up.
The news is all gloomy. In spite of the overriding negative bias, we are not going to zero but I believe that we have some down side exposure and it could last for a while. My Bruce indicator, which I wrote about a few weeks ago, predicted a bottom at 1,042 on the S&P 500 and the Bruce barometer proved to be wrong this time so perhaps Bruce was correct at least so far.
Next week is the beginning of earnings season and expectations are high for most companies. These companies will most likely report similar earnings to the first quarter which were generally pretty good, but the market was not happy with them at that time and the market went down. I think that the same scenario will help push the market down again as expectations are not likely to be exceeded in most cases. This coupled with continued bad news about the new financial regulations, European debt problems, American debt problems, incompetent government leadership and the mother of all oil wells still spewing out oil will overshadow any good news.
My prediction is an S&P 500 below 950 within the next 90 days. This will be a great buying opportunity if you have the stomach to dive in.
I generally believe that the economy is improving and that long term the market will go up. Therefore, with some cash on the side I remain 80% plus or minus invested hoping that I am wrong and the market goes up.
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