When I lived in Colorado, it was said: If you don’t like the weather, wait an hour. That’s how I view the stock market of late: If you don’t like the direction of the market, then wait-perhaps, not an hour, but a couple of days or weeks. Last week, for the first time the BOJ adopted a negative interest rate policy, and the market went up. Up to then, the sentiment was very dour, as oil prices were sliding fast, Apple’s outlook wasn‘t very rosy, and economists started to break out their harmonicas for the troubling global economy that lay ahead. But, then, the tune of “Happy Days Are Here Again” started to be played throughout the global markets because of the BOJ news, oil stabilizing, and people just like nuggets of good news- no matter how counter it is to the reality of the landscape.
I still believe the market, DJIA, will dip to the low-15,000’s, by August of 2016, because earnings growth will be deeply challenged by the poor global economy, and in particular, the weak U.S. economy.
For my very short term outlook, by the close on Friday, February 5th, the DJIA will be 16,200, or down 1.2% from Monday’s intra-day 16,396.93. By the end of February 2016, I expect the DJIA to be slightly below 16,000.