What 2013 Could Bring for Gold, Apple, Bank of America, and More
By T3Live.com Dec 31, 2012 11:20 am
From T3's Scott Redler, some key predictions about next year's markets.
In the last 15 months alone, there have been seven inflection points where a trader could have adjusted his or her risk based on market composure.
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CURRENT TRENDS TO WATCH
When you zoom out even further to a monthly chart, there is an interesting trend that is worth taking note of. I think that this decade+ long range in the S&P will get resolved to the upside.
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The question to me is "when" the S&P will be able to break that level, and how to best maneuver the market along the way. I believe you need to have either an ultra long-term approach to the market, or commit to being an active trader that maneuvers trends on multiple shorter time frames based on the conditions. The "herd" tries to manage their portfolio within a middle ground, and that simply leads to panic and exuberance at the wrong times, in my opinion.
With a longer-term outlook, I believe once the double top at 1575 gets taken out the S&P 500 can reach the neighborhood of 1700 by 2015. I vehemently disagree with the self-important attention-seekers that come on the media and call for the bear case of 1000.
If you are also going to manage your money using an active approach, it's important to understand how to maneuver your capital no matter where the market heads over the next few years. That is my primary domain. While I am optimistic about equities and believe the market is built to go higher, I let the price action do the talking when it comes to my trading.
Heading into 2013, on an intermediate-term basis the market has been in a new fledgling rally since Thanksgiving, although we are coming under some pressure within the last two weeks as the fiscal cliff gets closer. Taking caution, I believe, is the best approach until we get resolution to the fiscal cliff.
The question in my mind is whether we get a pullback and "shake out" before heading higher in the first half of 2013. We may end up going over the "cliff" and then the government will need to address the debt ceiling again in January and February. Many believe that if we get a fiscal cliff deal done it will be smooth sailing for the market immediately, but I don't think they ever make it that simple for investors.
Scott Redler is long BAC, YHOO. Short SPY.