I was on BNN MarketCall on Friday—it was a bit of a hectic evening, with news being announced after the bell regarding the approval of the Nexen / CNOOC deal. BNN brought in Sprott’s oil & gas manager for the first half hour of the usual 1-hour show, and then I did my technical analysis calls for the second half of the show.
My broad-based theme of late has been, short-termed bull (2-3 months), longer termed bear. On BNN, I opened by presenting a couple of charts that highlight the deteriorating breadth of US markets over the past 2 years, as well as the declining trends of oil & copper—all in the face of a rising S&P 500. These factors, amongst others, continue to wave a caution flag for those who might plan on staying long the markets for too long (excuse the pun). In the very near term I remain bullish, although the S&P is now testing resistance that it has come up against a few times this year. See the horizontal line on the chart, which illustrates this old resistance level at around 1420. Further, there will be a bit of a hurdle going through the 50 day MA which lies at the same level.
Until the fiscal cliff crises is solved, the 1420-ish area may to provide a bit of a barrier for the S&P. Should a deal pass, I’d expect a clear run up to my final target of 1500-1550 by early 2013. I’m cautiously optimistic for that outcome.