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Minyan Mailbag: What's Your Price Target?


Respect the potential for upside follow through.


Todd --

I always admire your intuitive sense for the market, and was wondering if you have a price target (or range) for the current rally off the March low?

I agree with
your thesis that this powerful rally off the March low is most likely a cyclical bull within the context of a secular bear. As the market moves higher, I hear many pundits 'calling the bottom'. Since the primary job of every bear market rally is to appear to be the start of a new secular bull, this appears to have followed suit.

The only question in my mind is how far this rally will run. Using the six '29-'32 bear rallies as reference it would appear the rally could run anywhere from 24-48 percent, with the greatest concentration in the mid- to upper-20% range. That would indicate a rally peak anywhere from current levels to SPX 985 (200-day moving average). Your thoughts?

I'm tempted to short the overbought market here, particularly with several gaps visible under current price levels, but I'm mindful that the 'powers that be' might make a concerted effort to keep it buoyed through expiration. I consider government intervention the 'wild card'.

As you so astutely mentioned in earlier postings, "trading this market is playing chicken with the Fed" (paraphrased). As Minyans know, they've thrown the 'kitchen sink' at the market in an effort at stabilization. While I don't believe the government can control the long-term direction of the markets, on any given day they can exert their influence. Their period of choice is often around expiration. So I remain cautious here...

Best regards,

Minyan Glenn


I generally agree with your assessment-remember, my 'sense,' shared in January and reiterated in early March was that we would see one or two 25% rallies this year. The question, I suppose, is whether they're stacked back-to-back in the front half of the year or interrupted by a harsh downside comeuppance.

Given the breakout in the banks (above BKX 32.5), we must respect the potential for the S&P to follow through to the upside, potentially driving the tape towards the 200-day moving average (currently S&P 990), sucking new found optimism into the market and paving a fresh path of maximum frustration

The other side of that trade--one I'm wary of--is that the market rip-roared into earnings and the field position is "toesy." Remember, news that is good (but not great) is sold in overbought markets while bad (but not horrid) news is bought in oversold markets. That's the risk to this earnings season, that perception got ahead of reality and performance anxiety trumped prudence. See both sides, Minyans. Always see both sides.

I'm humbly resolute in my long-offered view that this prolonged process will be a multi-year malaise and we're experiencing a cyclical bull within a secular bear. I could be wrong, of course, but we're not destroying debt, we're inducing it and that's running in the wrong direction. How those imbalances manifest-a currency 'release' (dollar debasement) or lower asset classes through further deflation-remains the trick to the trade.

For my part, I'm taking the journey one step at a time while understanding there will be frustrating junctures, opportunity costs and opportunistic holes to hit. Through it all, my modus operandi is "risk management over reward chasing," "financial staying power" and a steadfast desire to be part of the solution rather than part of the problem.

Easier said than done, for sure, but it will surely be done easier as part of the Minyan community.

Thanks so much for the time,


In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.

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No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

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