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An Updated Look at The Full 2014 S&P 500 Forecast
By, Simon Maierhofer
Friday February 28, 2014
Publishing any type of actionable market forecast always provides easy ammunition for criticism. Nevertheless, what use is there for all kinds of indicators if they aren’t used to formulate a forecast? Here’s an update to the normally exclusive 2014 S&P 500 forecast.

On January 15, I published my full and complete 2014 S&P 500 forecast for subscribers of the Profit Radar Report.

It is impossible to get a full-year forecast correct, so publishing a detailed forecast with an actual projection of the ideal S&P 500 (SNP: ^GSPC) path really provides easy ammunition for ‘you were so wrong’ criticism.

But, if you can’t take criticism as a market forecaster, you are in the wrong business.

Since I follow so many indicators (technical analysis, chart patterns, Elliott Wave Theory, support/resistance levels, investor sentiment, money flows, seasonalities, cycles, etc.) it would be a cowardly waste of research not to ‘puzzle’ them together for a full-year big picture forecast.

Obviously, it wouldn’t be fair to paying subscribers to publish the entire forecast for free, but below is an interesting tidbit of the 2014 forecast.

The S&P 500 chart shows important support (green) and resistance levels (red).

The key resistance level for the first quarter of 2014 was S&P 1,855.

The January 5 Profit Radar Report stated: “Sentiment and midterm election year seasonality suggest stocks are ripe for a multi-week correction, but technicals have yet to turn bearish. Elliott Wave Theory would easily allow for another small down – up sequence and larger scale high, later on in January. Fibonacci projection resistance going back to 2002 is at S&P 1,855.”

The S&P 500 topped at 1,851 on January 15 and fell below 1,740, exactly as outlined by the yellow projection, published in the 2014 forecast. Thereafter the S&P 500 rallied to new all-time highs, also as outlined by the yellow projection.

For the past week again the S&P 500 has struggled to overcome 1,855 and now has to prove it can stay above. This particular Fibonacci resistance is a Fibonacci projection level that goes all the way back to the 2002 lows.

As you can see, the form (and corresponding price levels) of the V-shaped correction/recovery pattern has been spot on, but the timing was off.

I didn’t expect the low until around mid-March.

The eventual high could mark a major top. Why? Two monster long-term stock market cycles actually cross paths this year and suggest a strong double-whammy market top (all details and charts discussed in the 2014 forecast).

Once we get to new all-time highs, we’ll have to see if any such high sports the tell-tale signs of a major top (I’ll be looking at certain bearish divergences that have helped identify similar tops in the past).

What about the short-term?

Up until last week the S&P and Dow Jones adhered to my short-term outlook, which proposed a strong rally from S&P 1,740 to 1,830, quite well.

However, the new all-time highs required an adjustment. The original short-term projection along with the adjusted short-term outlook for the S&P 500 (NYSEArca: SPY) and Dow Jones is available here, for free.

A Revised Short-term S&P 500 Outlook

Simon Maierhofer is the publisher of the Profit Radar ReportThe Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

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