Stock Market: Prediction Season is Upon Us

By Greg Guenthner, The Daily Reckoning Nov 4, 2013, 12:36 PM 

If history is any indication, the market is primed and ready for a fourth quarter rally.

“Shares have climbed in the final two months 82 percent of the time since 1928 when the benchmark gauge advanced at least 10 percent through October,” Bloomberg reports.

“With the first full trading week in November on the horizon, prepare to hear a lot of predictions for the New Year.”

If you plug in the S&P data, you get a mean November and December broad market increase of 6%. That adds up to a year-end of 1,862 for the S&P 500…

Of course, this guess — even with the help of some statistics thrown in the mix — doesn’t mean jack to the markets.

But prediction season is upon us. That means all of your favorite prognosticators will soon roll out their guesses for 2014 and beyond.

“With the first full trading week in November on the horizon, prepare to hear a lot of predictions for the New Year,” muses Jonas Elmerraji in his weekly trading note. “Every pundit on TV, in print, and on the web is going to try to force their crystal ball – excuse me, I mean ‘research’ – in your face. But unless it’s presented with a contingency (the move that lets you know you’re wrong), I’d suggest taking those predictions with a grain of salt.”

Jonas’ trading approach is a “green light, go” system. He isn’t trying to predict when the traffic light is going to turn green – he just hits the gas when it does. That’s how you should approach the market every single day. After all, this is the type of calculated strategy that will help you squeeze consistent gains without any unnecessary bias getting in the way.

Shut out the noise and direct your full attention to the big market trends. The S&P remains in an uptrend as we begin a new trading month. I can’t tell you where it will land on December 31st. But that doesn’t matter. You don’t have to make outrageous guesses to book gains in this market…

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