What Lies In Store For Q2 2011 and Beyond?

Posted by Moby Waller on April 6, 2011 5:13 PM

Every winter, Price Headley and the BigTrends analysts (Bob Lang, Andrew Hart, Moby Waller & Scott Downing) prepare a free in-depth outlook for the year ahead.  We analyze and break down the stock market, volatility, individual stocks, the economy, international ETFs, sectors and the Fed, among other areas.  This is combined into our 2011 BigTrends Market Outlook (download the 30 page report here).

With the 1st quarter of 2011 just coming to a close and the 2nd quarter just beginning, how have the markets done so far this year?  Well, we forecasted in our 2011 Report that this year would be a positive one for the stock market, with an emphasis on the bullish mode for the first 6 months of the year -- and we've seen gains of 5.4% for the S&P 500 Index (SPX ) (SPY), 5.5% for the Nasdaq 100 (QQQQ), 7.6% for the Russell 2000 (IWM), and 6.4% for the Dow Jones Industrial Average (DIA) for Q1 2011.

One of the many charts in the 2011 BigTrends Market Outlook was the Fibonacci Retracement of the S&P 500 which gave us upside targets of 1,361 and 1,400 for the first half of 2011 (possible outlier rally to 1,500)-- and with the SPX closing today at 1,335 we are only 1.9% and 4.6% away from those first upside targets currently.  Something to keep an eye on as we approach those upside levels in the 2nd quarter (April to June 2011).

SPX Weekly Fibonacci Chart (from 2011 Market Outlook, with updated note)

Beyond the charts and sentiment analysis we go through in our free white paper, we also were on top of a historical calendar trend that gives a strong bullish bias to both the 1st and 2nd quarters of this year.  Historically in the 2nd & 3rd year of a presidential cycle, the market outperforms strongly in the 4th qtr of year 2 (2010) and the first 2 quarters of year 3 (January to June 2011).  Take a look at the graph below which shows this SPX performance by quarter over the past 50+ years, also from the free download 2011 BigTrends Market Outlook:

SPX Election Cycle Quarterly Return (with updated note)

And there's much more that applies to the market situation currently in our detailed PDF report.  Price Headley breaks down the markets and sentiment, Moby Waller analyzes volatility and the VIX for 2011, we analyze the Economy, Bonds, Dollar, Commodities and the Fed, Bob Lang and Scott Downing give specific top stock ideas for this year and Andrew Hart gives his favorite ETF and international picks. If you haven't downloaded this great report yet, do so today before it is pulled down from the BigTrends site soon!