HedgeFundLIVE — Market expectations are as follows…
Yesterday was the start of things I’ve described in my previous blogs over the last month. A test of the 1300 level held. With that said, earnings season is far from over, and a continued slide in commodities is a very real concern. It is very possible that we trade a range of 1300 – 1320 for the rest of the month, as many professionals will be taking time off for the holidays. The banks have found a comfortable level and Goldman looks particularly attractive at 154 – 155. They will survive. Inflation may hold steady, but ultimately that may actually mean a short-term correction, as the dollar will show strength under those circumstances. Yesterday was the first real day air came out of the very high beta names. NFLX seems to be the most logical short as serious competition is on the way, and they continue to sign overpriced deals with studios, which will affect earnings. A miss by NFLX would be disastrous for them as well, like many overpriced Internet names. A 1254 test and perhaps a low of 1225 would complete an appropriate correction after a tremendous run since the financial crisis. The long-term economic outlook looks good and I still maintain my year-end 1440, which may be even higher if there is a legitimate correction. As was written in my previous blogs, the employment picture is holding steady, but not improving, as the Government would like you to believe.
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