I have recently written a few articles discussing my directional perspective on the S&P500. In fact, my long-term target has been 2537-2611SPX for years now. Moreover, before we entered 2016, I noted that I was looking for a rally to 2300SPX in 2016, but with the market potentially dropping to the 1800SPX region first into February, as you can see from the chart outlining our analysis for 2016.
But, I also believed that the 2300SPX region was only a way point, as I expected us to head much higher in 2017.
Now, the comments to these articles have been quite interesting. The common underlying theme seems to suggest that the fundamentals of the market have not supported this rally, and still do not support the market for being as high as it is currently. And, when I question these commenters, they are more than happy to admit that the market is simply wrong for being as high as it currently stands.
Folks, I don’t know about you, but from where I come from, the market is always right and price represents the ultimate truth in the market. In fact, one of my members provided me with a wonderful analogy to drive this point home:
If a weather forecaster calls for sunshine, but instead it rains, would we then say that the forecaster was right, but the weather was wrong?
Saying that the fundamentals are right and the market is wrong is no different than our weather example.
Even those that believe fundamentals drive our market easily admit that there are many times where the fundamentals do not control, and we are now in the midst of one of those times. But, let me give you another example. Let’s say a car is set up to be driven by remote control. When we place someone behind the wheel, and he turns the wheel in the direction the car is moving some of the time, do we say that the person in the driver seat is controlling the car, or is it the one with the remote control that is driving the car all the time?
This post was published at GoldSeek on 21 February 2017.