Where do stocks go next? Probably Sideways
Where do stocks go next? Probably Sideways
From mid-March to early May of this year,
the stock market made a swift and steep 35% rise. Since late last year, you
have seen blogging here about how much the recession and now this recovery
feels like that of the mid-70s. To date the stock charts still track quite closely. And
psychological sentiment (although not closely measured back then) still feels
similar to the jitters and ambivalence consumers and investors manifested in
mid-1975.
So where do we go from here? Continuing to use 1975 as our guide, look for the
market to move sideways for quite some time. After a quick 2-3 month jump up in
early 1975, it wasn't until later that year and into 1976, that the market
continued its march upward, resting at just north of a 60% bull move into early
1976. The market then kept meandering upward until late 1980 for a total 6 year
return of
close to 125%.
So we have likely seen the first leg up for stocks. For the remainder of the
year, economists will be watching housing market stabilization, further
improvement in manufacturing, and falling unemployment. Only then will the market have the
confidence it needs to move higher.
thnx n regards
MANISH SINGH
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