2Q & S&P PREDICTION

As you know by now, I do not like making market "projections" but for what it's worth, here is what I am thinking on the S&P.

The S&P rally can continue with solid bank earnings. I due believe that the 875 resistance will be difficult to drive through, unless bank earnings are incredible. I think in the next 6 months we will be higher from now, getting between 1000-1050 on the S&P. I don't believe it will be a straight line up, which is what will create the challenge. If you buy the "high" points on the channel and sell the "low" points, you will lose big money, in my view, possibly majority of your portfolio. To reduce that risk, I believe keeping high cash levels of 25-30% will help, so if you buy high, you can cost average into key positions. I believe the S&P will move in a "sawtooth" pattern, rather than a "lower left to upper right - diagonal, upward line". If my prediction is true, this market will be difficult to trade; however, timing will be key. If you time your trades perfectly, you will make a very high return. As mentioned before, I believe 777 on the S&P is VERY FIRM support and it's possible we can retrace to that but I doubt we will trade below that. As for upside, I expect to see 875-900 very soon (within 2 weeks) and my ultimate price objective on the S&P is 1050 - let's say by Labor Day.

In conclusion, I suspect a channel forming in the S&P very soon and a top to bottom touch of about 2-3 times before we reach new highs. As for sectors, I suspect money to flow out of healthcare and consumer staples and into technology, energy, and consumer discretionary (I don't know this for a fact but if I managed billions, that is what I would do).

As for today's trading, futures are lower, which is what I thought (hence the 50% cash level). If we have a bank preannounce by 9a, we could rocket higher. I plan on buying stuff today, so I will post later.