Will 2014 Be a Lost Year?

iSPYETF

“Never give someone the opportunity to waste your time twice”

Most people don’t like wasting energy on stuff without getting results.

So far, 2014 has been a lost year for most investors.

The chart below shows the year-to-date performance of the S&P 500 (SPY), Dow Jones, Nasdaq Composite, and Russell 2000 (blue line = 2013 close).

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There’s been a lot of up and down and a lot of sideways trading, but at the end of April the indexes are basically stuck in stalemate.

Will the entire year be like the first four months?

Quite possibly. The Profit Radar Report’s 2014 Forecast (published January 15, 2014) featured a full-year S&P 500 projection, which pegged the S&P 500 in April at the same level as its 2013 close.

Despite an exciting summer (more details below), the Profit Radar Report’s 2014 projection also puts the S&P 500 at year-end close to where it started the year.

Bulls Can’t Break Out, Because …

Right now the S&P 500 and Dow Jones (DIA) are held back by strong technical resistance.

The Dow Jones chart below shows some of the long-term resistance levels (made up of trend lines and Fibonacci projections).

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Bears Can’t Peel Away, Because …

Too many cooks spoil the broth … and too many bears spoil a potential crash.

CNBC reported this morning that: “Bubble talk catches fire among big-money pros.”

It’s this kind of ‘preemptive bearishness’ that’s kept stocks buoyant for well over a year.

This combination of overhead resistance and the ‘bear put’ is likely to keep stocks in a trading range.

However, I expect this trading range to expand soon.

Bearish S&P 500 seasonality should soon drag stocks lower. The old ‘Sell in May and go away’ adage has received a lot of play this year, so the stock market is likely to ‘flush out’ the now crowded trade with another head fake.

More details here: Expecting ‘Sell in May and Go Away’ Pattern? – Prepare for Surprise

Simon Maierhofer is the publisher of the Profit Radar Report. The 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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