DOW 10,000, soon S&P 1100 and then.. flattening of the markets.
We are just starting a positive earnings season of Q3, with good reports from Alcoa, Intel, and JP Morgan.
Just a couple of companies positive news has driven us to DOW 10,000 today. S&P is 8 points away from my predicted target of the last several months of a range of 1100-1200 in the year 2009.
We still have a couple more weeks of earnings season, and it is likely that we could go much higher into the 1100 S&P range soon.
When we crossover further above DOW 10,000 and S&P 1100, these will become psychological barriers, setting a strong lower bound on the markets. This has happened previously (link ), where after crossing 10,000 the market clings to this waypoint for a while.
The markets have risen quite fast, and strong over 2009. While there is lots of good news to be expected if we are truly entering economic recovery in Q3 of 2009, its time for the news and market to catch to each other.
I expect that when we enter into the range of S&P 1100-1200 that we will stay there for a long time. To go higher would enter irrational exuberance mode and require all the individual investors to come off the sidelines - I don't see that happening until unemployment falls below 8%.