Wall Street Sees Continuing Rise in 2018, Healthy 10-15% Correction Expected

Wall Street Sees Continuing Rise in 2018, Healthy 10-15% Correction Expected

Wall Street Sees Continuing Rise in 2018, Healthy 10-15% Correction Expected

$DIA, $SPY, $QQQ, $VXX

The Bull Market is on track to mark its 9th birthday on 9 March 2018, with the S&P 500 climbing 19.4% in Y 2017, its biggest run since 2013.

The drop in the corporate tax rate in Y 2018, to 21% from 35%, is seen as the biggest factor for the stock market next year.

Share gains in Y 2018 are expected to be smaller than in Y 2017 with the S&P 500’s PER (price/earnings ratio) around its highest level since June 2002.

Some Wall Street ‘mavens’ cite potential pitfalls even though they see no signs of a recession.

Some say The Trump Tax bill’s benefit will be short lived because the tax overhaul will improve spending but does nothing to boost productivity.

Some other Wall Street strategists cite the risk that faster economic growth could cause inflation to increase at a pace that would lead the Fed to raise interest rates faster than expected.

But, remember, No inflation, No growth.

Below are 2 of the worries Wall Street traders are contending with:

  1. Investor moods in January may depend on whether the Congress reaches an agreement to raise the country’s debt ceiling.
  2. Investors will be hoping Congress can reach a Y 2018 budget pact by 19 January.

Friday, the major US stock market indexes finished at: DJIA-118.29 at 24719.22, NAS Comp -46.77 at 6903.39, S&P 500 -13.93 at 2673.61

Volume: Trade on the NYSE came in at: 710-M/shares exchanged

  • NAS Comp: +28.2% YTD
  • DJIA: +25.2% YTD
  • S&P 500: +19.4% YTD
  • S&P Midcap 400 Index: +14.7% YTD
  • Russell 2000: +13.4% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Very Bullish (0.61) Bullish (0.35) Very Bullish (0.81) Very Bullish (0.67)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Very Bullish (0.51) Bullish (0.35) Very Bullish (0.60) Very Bullish (0.58)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.39) Neutral (0.19) Very Bullish (0.50) Bullish (0.47)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.46) Very Bearish (-0.59) Very Bearish (-0.57) Neutral (-0.21)

I will be reporting on the issues here, so check in daily.

Have a Happy New Year.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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