Thoughts: {01.11.16}

Rest In Peace David Bowie.

Markets look like the want to rebound at least at the open today.  Of course we started higher on Friday only to see a massive bout of selling hit the markets late in the day.  Nobody it seems wanted to go home long equities over the weekend.  Markets are very oversold right now so any sort of rally could hold for at least a few days.  Markets are a slave to oil and until that gets a bid then there is a real likelihood that stocks continue to struggle.  

Even when we rally it's going to be hard I think for stocks to break out to new highs.  All that resistance I've highlighted in the past {see Friday's post} is likely going to be a significant barrier to prices higher than last May's close.

I've been asked about ranges for the market this year.  I'm not done putting a pencil to all the numbers yet for this year but on a preliminary basis I'm thinking S&P 500 earnings of 122-127 with a 124 mid-point.  I think our Cone of Probability** will likely be 1,700-2,200 on the S&P 500-not much different than last year.   Again that is a work in progress and I'll go into this in more detail when I've finished the work.

I'm also thinking about some other changes in terms of market analysis but not prepared to do anything with these as yet.  

Back tomorrow.

*Long ETFs related to the S&P 500 in client and personal accounts. Although positions can change at any time without notice.

**The Cone of Probability {COP} is our current assessment of the trading range within which we think stocks have the potential to trade during the described time period.  It is a probabilistic assessment based on a many factors.  Some of these inputs are: Earnings estimates, also are those estimates rising or falling, dividend yield, earnings yield and the current yield on the US 10 year treasury.  This is not an exhaustive list of all of the variables that are used in creating the cone.  The Cone of Probability is used solely for analytical purposes.  It will fluctuate with market conditions and changes to the data inputs.  Index prices can and have traded outside of the range of the cone.  The data supplied when we discuss the cone is for informational use only.  There should be no expectation that this price range will be accurate and there are no guarantees that this information is correct.