This week I am preparing to write our annual Outlook and Forecast for 2014 which is an annual attempt to make a “wild @$$ guess” about the future based on what we can glean from historical statistics. However, while it is an exercise in data analysis, logic and educated guesses – the reality is that is not so far removed from Tarot cards, crystal balls and palm reading.  

However, the amount of research required takes an exorbitant amount of time which means that this week’s newsletter will be a little more concise than usual.

Since there was no newsletter over the Thanksgiving weekend I want to take a moment to remind you of what I said two weeks ago as it is relevant to today’s topic.

“The discussion of both parabolic markets, and trend analysis, are keys to the overall understanding of why the markets could rise to 2300. The chart [on the next page] shows the current bullish trend(s) of the market since the lows of 2009.

As you will notice the market is currently pushing into the resistance of the original bullish trend line that begins in 2009. The break of that trend line in 2011 has now turned the trend line from support into resistance. 

However, as shown by the red dashed line, the current bullish trend has begun to accelerate from the trend that begin post the 2011 debt ceiling debate. IF this market is going to accelerate higher from current levels it will be important that it either breaks out above 1800 on a sustained basis OR the market pulls back to 1700 and holds support at the current bullish trend line.

The PRIMARY ISSUE here is that there is NO valuation argument that currently supports asset prices at current levels.

>> Read More. Download This Weeks Issue Here.