Technicals | Jan 19 2012
By Rudi Filapek-Vandyck
One of the more interesting tid bits in hundreds of pages of expert research this morning comes from US-based strategists at BA-Merrill Lynch who have a mildly positive view on prospects for equities this year, but one that is turning less positive as each day of new gains passed. BA-ML has entered the new calendar year with a year-end target for the S&P500 of 1350. A few weeks ago this implied mild gains ahead, no doubt to be complemented with some healthy dividends on top. But now the index has re-conquered the 1300 level and we're not even in February!
The strategists are clearly torn between two opposing forces. On one hand they predict this rally in risk assets has probably further to go. On the other hand, the strategists advise investors should start taking profits from the moment the index runs past the 1350 mark.
We note US-based market trader Dennis Gartman also remains mildly positive on US equities for the short term, as does BTIG market strategist Dan Greenhaus.
Technical market analysts at Barclays appear to agree. They have lined up several market signals that should bode well for the weeks ahead, including a positive signal from Dow Theory which requires Transports to confirm the positive trend for the Dow Jones Industrials.
Technical limitations
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