S&P Long Term Views

After a quick glance at the charts this morning I would say it would appear that last year’s pattern may hold, where the gold stocks were the early indicators and the stock market followed it down by about 15 trading days. This year the gold stocks have already turned down, meaning other stocks should follow right after July 4th, 7/7/09 has a nice ring to it. In the meantime the 894 level will probably be support.

Longer term I anticipate a drop to 760 on the S&P sometime in the next 120 days. Could be at any time but in any case my opinion is that the support at that level will be tested and hold.

Secondly, I don’t see inflation in the picture until another round of stimulus is put in gear and starts to really work, at least a Trillion of real stimulus,not loans as most of it has been to date. I think it will happen when the wheels come off the stock market and the bears come out of the wood work and start talking about the S&P at the 300 level. There are some real bears out there, analysts like Prechter who are looking for the March lows to not hold. On the other hand, the Obama administration knows when and what to do when the going gets tough.  Geithner, and Bernanke will go into action when the dishes start flying out the window.

The EMA ETF Fund Nav was 1132 at Friday’s close.

8:38 AM CDT