We were just speaking about the markets with Lange Financial Services and wanted to share the thoughts with you now.
The market has sold off sharply this week. Nasdaq is down now about 4.0% and other indexes are down up to 3%. We have recently stated here that we could have a “Pullback” of 3% to 5 % at any time. We have not been looking for a 5 to 10% correction that many pundits have been looking for. We believe that the Pullback is healthy and needed for the markets before moving to much higher levels.
“The Markets Make the News” is an old saying that has proven true so often. The market was ready for a pullback. Plain and simple. It would have done so with or without the crisis in the middle east. We view the situation as the rationale for a pullback as was the EUROZONE crisis in the Spring. On the same token, when the market is ready to go up, it will. There are a tremendous amount of positives in the economy. We have covered most of them on the site here in previous posts. Our views have not changed regarding the markets and our targets for the S&P 500 earnings are $100 for 2011 and $110 in 2012. The target for the S&P 500 remains 1550 over the next 12 to 18 months.
There are quality stocks now trading down up to 10% or more in the past few days. Little has changed on their outlook fundamentally. One can see this afternoon that the pressure is already lightening on the markets.
We continue to suggest accumulation of quality growth stocks during this weakness.