Jeff Greenblatt, director of Lucas Wave International, says he is a little weary of looking for bearish time windows in the S&P 500. Greenblatt saw many come and go in the fourth quarter and the index weathered them all, making a multi-year high in December. His conclusion is there is more strength than many technicians thought.
Alan Bush, Archer Financial Services’ senior financial futures analyst, is not so conflicted. Bush is bullish on the S&P now and into 2011. He attributes the strength to the numerous stimuli by the Federal Reserve and says it is paying off in some areas, though not enough to push the Fed to begin tightening in 2011. “I don’t think we needed QE2, but it is going to make the recovery stronger,” Bush says. He expects the S&Ps to reach 1260 in January. He sees support at 1216 but doesn’t expect it to be tested, adding even if that were taken out, it would not alter his bullish perspective.
Greenblatt is expecting choppy markets for the next several months and any major move to be to the upside. “We escaped the grim reaper in September and October,” Greenblatt says, referring to the seasonally bearish months that coincided with significant turning points. “This market tried to go down and it wouldn’t,” he says. Greenblatt adds, however, that it may only be a temporary reprieve as he sees a large move, probably down, in July or August 2011.