Get Ready for This S&P Target
After Labor Day, with the S&P closing just 4 points off the all-time high at 2190, I explained in a private blog Confidential report why volatility was about to come roaring back. My simple forecast was "2050 before 2250."
The logic was also simple: the "too scared to hike" Fed was feeling guilty about sitting on their hands and the "too close to call" election was about to get even more interesting with the first debate scheduled for September 26. Combined with weak economic data, these events pushed the "uncertainty" meter to 11.
Now, big money managers from Goldman to UBS are calling for lower stocks this month as bond yields surge and the VIX spikes toward 20. Glad they caught on. But the question becomes...
How low will she go?
The S&P is sitting on support at 2120 and looking like it wants to test lower. A break of 2100 would target 2075 and likely even the 200-day moving average just below 2060. My advice: have cash on hand and your buy list ready to grab favored stocks on sale this month.
In short, prepare and position your portfolio for a classic fourth quarter rebound.
