To us, there are four main parts to 2014’s potential rally – the loss of QE, can Europe make a comeback, employment/data has to be strong and whether stocks overvalued after an amazing 2013 run. These four elements will definitely predict how the market does in the new year. For QE, the market will have to start to stand on its own as the Fed will likely continue to taper their asset purchases. Can the market stand on its own and how will the Fed do with unloading their assets? Is Europe going to continue to make their comeback in 2013? They need to stay strong in the coming year to help global markets. Further, we need to see strong data continue to improve as the market is going to have to stand on its own without the Fed more and more. Finally, 2013 was such a great year that many believe that stocks are overvalued and buyers are tired. We will dig into historical valuations as well as current market participation to understand that.
….read the whole article HERE