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S&P 500 Prediction
In his latest article on the markets and investor sentiment, Guy Lerner explains why the S&P500 is hitting new highs and the likelihood of it sustaining this bullish trend.
Always quick to admit his mistakes, Lerner lets his readers know that he did not see these new highs coming. It was two months ago when he thought the S&P was looking top heavy (and due for a correction). As he always does, Lerner backed up his prediction for a correction (two months ago) with some pretty convincing data. Regardless, since that time the S&P500 has managed to hit a new high with the bulls claiming the wall of worry will continue to be climbed. In addition, as is typically the case, analysts are making bullish predictions for the S&P500 come year’s end. Lerner states “Suddenly, analyst year end up grades are coming fast and furious. 1450, 1500 and 1550 on the S&P500. It is all good. But where were these calls 140 S&P500 points ago? Just remember what the market was telling investors at the October, 2007 market top when it hit an all time high (SP500 1576.09) and just prior to cratering over 50% in 2008. I am sure it was a similar message we are hearing this week.”
So, despite being wrong a couple months back (or premature in his prediction depending on how these next couple months play out), and taking a rather bearish stance, Lerner is sticking to his guns and believes the bear will surface soon - kudos to him for following through with his initial predictions. Who can blame him? The data he presents in his latest article in support of his bearish sentiment is very convincing.
Lerner states “Looking ahead, I don’t believe the bullish extremes in investor sentiment that we are currently seeing will morph into one of those situations where it “takes bulls to make a bull market”. In those kinds of rallies, the extremes in bullish sentiment were the start of the bullish run as opposed to the end of it. 1995, 2003, and 2009 would be good examples where too many bulls was a good thing. Those kinds of bull runs happened after prolong bearish periods, and today’s environment has been anything but that.”
Click here to read Guy Lerner’s S&P 500 prediction.