an tSionna {SPY}

We're going to spend some time over the next week or so taking a look at some charts that I think are important.  Below is a chart of the S&P 500 Index ETF SPY going back to the end of 2011.  {Chart courtesy of FINVIZ.com}

Not a lot of commentary to add to this chart because as you can see it has been a straight stair step march higher.  According to Bespoke Investment Group {subscription Required to view this report}, "the S&P 500 has now rallied 58.6% over a period of 515 trading days since October 3rd, 2011 without declining 10% from a high*."  Investors were much more negative back in 2011 which can be seen in the market's forward PE average which traded at just under 12 back then as opposed to around 15.5 today.  We took a bit more optimistic view back then, thinking that stocks had to potential increase by double digits in 2012.  

We're still optimistic on stocks albeit with the understanding that stocks aren't as cheap today as they were back then.  We still believe that a combination of improvements in technology, innovation, cheap energy, improvements in housing, the continued repair of balance sheets and the end of gridlock  in Washington equates to an economy that has the potential to grow 2-3% GDP in 2014.  That has the potential to drive stock prices higher unless we rob next year with a year end blow out rally in the markets.  More on that thought at a later date.

*Bespoke Investment Review, Market Recap, "515 Trading Days & Counting",  October 21, 2013.

**Long ETFs related to the S&P 500 in client and personal accounts.