so you have 6 weeks to go for 200 points , that is 33 points gain per week on avarge . I think this is achievable with 2 to 3 100 point sswings days ( up & down ).
1) Analyst Avarage for S&P By 12/31/2008
The average Wall Street forecast calls for the S&P 500 to break out of a bear market and surge 20 percent to 1,118 by Dec. 31 -- more than twice as much as the biggest-ever advance to close out a year, according to data compiled by Bloomberg. Strategists were even more bullish at the beginning of the year, predicting that the S&P 500 would end 2008 at a record 1,632.
http://21cvision.blogspot.com/2008/11/believing-in-estimates-means-20-advance.html
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2) schaeffersresearch
One could argue that a 25-year bull market ended in early-2000, even considering the bottom in 2002-2003 at the 160-month moving average (blue) and the subsequent move to marginal new highs in 2007. The S&P was basically cut in half from 2000-2003, doubled from 2003-2007 and has now effectively been cut in half again. This is not long-term bull market behavior, and it is further accentuated by the slice this month through the 160-month and then the 195-month moving average.
But what might be of greatest concern is the fact that 10-month historical volatility for the S&P at 35% (in blue in its own pane) is only matching that which occurred in 2002-2003, and is shy of what occurred in 1987. This is due to the fact that the current volatility explosion was preceded by three years of very low volatility. Low volatility doesn't always have to be unwound as a negative for the market, as you can see from how the low volatility of the early-1990's resolved itself into a major bull market replete with rising volatility (a sign of speculation, which of course ultimately killed it).
But this time, the low volatility was created in large part by mean reversion-based activity (premium selling and quant trading) by the dominant players in the market – the hedge funds – and it is the massive unwinding of this "dimes in front of a steamroller" trade that is creating a mirror image of high volatility as well as death and destruction in its path. To this I will add the unwinding of a bubble they created in commodities stocks that in retrospect put the tech bubble of the 1990's to shame.
"Now or when?" is a good question, and the answer is that nobody knows because so much depends on how much further the hedge-fund unwind has to go. A related question is whether the full extent of the toxic credit derivatives situation (also created by the existence of big hedge fund money looking for easy returns) has been played out. The current situation is also different from past big declines in that there are no natural buyers to support the market. The public has been out of US stocks for years and is getting decimated by their huge emerging markets exposure and is scared (but not scared enough).
1) Mutual fund managers and financial advisors can talk it up on CNBC and cite all the examples in history where pullbacks were a great time to buy, but they've got no new money to invest.
2) In addition, corporations cannot and/or will not buy back their stock as liquidity is being hoarded.
And all this is occurring while the market is in its worst technical condition in three decades, so I feel calls for a bottom are premature in both time and in price and the best you can say about this market is that it's very oversold and that any bounces should be viewed in this context.
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3) Fore cast 3 : from a daily commentary
For now, the only all-clear sign that risk-averse private investors should accept would be a close of the S&P 500 Index ($INX) above its 12-month average for at least one month, and preferably two straight months. That's currently 1,260, but it's moving lower all the time. If you want to take more risk and try to jump the gun at some point, wait for a one or two weekly closes above 1,010.
Thus the crisis will end only when private fund managers replace the government as the market's top credit buyers. Don't hold your breath, though, as that will require a large appetite for risk, which is painfully missing on Wall Street today at a time of shrinking balance sheets.
This new economic paradigm has already slaughtered many hedge fund and mutual fund pros who have gotten it wrong, so it's going to take unusual foresight and patience for individual investors to survive. My recommendation is to avoid getting sucked into rallies in seemingly cheap stocks and high-yielding bonds except for brief trades, and just guard your cash patiently while awaiting the next bull market that's bound eventually to emerge after a lot more sideways action, or worse.
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