Outlook and Market Predictions for 2008
written by Adam Hewison
This week I am going out on a limb, dusting off my crystal
ball and looking into the future. Here are my predictions
for 2008.
I have to admit that forecasting economic conditions a year
in advance is a challenge. It's a little like predicting how
many hurricanes we are going to see in '08. In other words,
it's not an exact science.
So with that in mind, here goes...
Oh, before I forget, vote in our new poll on the 2008 economy.
Are you bullish or bearish?
Here are my predictions:
* INTEREST RATES: Lower to flat until Q2-Q3 of '08.
* ECONOMY: Softer overall with house values still eroding
and consumer confidence slumping at the same time.
Watch our video on the economy:
* ENERGY: Continued high demand for petroleum products will
keep prices high to higher in the first half of '08 despite
the slowing U.S. economy.
Watch our energy video:
* DOLLAR: We may have seen the worst of it in 2007. Look for
further sideways to defensive action in Q1.
Watch our currency video:
* OVERALL: Many consumers are feeling the pinch of higher
energy prices and higher fuel bills. Property prices
continue to weigh heavily on the market and on consumers
minds. With many home owners using their homes as personal
ATM machines in the past few years, it is now payback time.
Homeowners will begin to shrink from the retail scene as
they begin to have to begin paying back their bank loans.
Overall this will have a negative effect on consumer
spending and will show up in retail stores and sales as
early as this holiday season and continue well into '08.
OUTLOOK FOR STOCKS:
Look for stocks to lose ground in Q1 and Q2 as the full
extent of the wealth robbing housing contraction/credit
crunch sinks in and into the pockets of consumers.
Watch our video on the economy:
DOW: The high that was seen in 2007 at 14,200 is likely to
remain unbroken in 2008. Look for this Index to fall back to
the 11,500 - 12,000 in the next 12 to 18 months.
NASDAQ: We expect that the 2,861 level set on September 31st
is likely to remain for some time to come. We are looking
for a pullback in this index to the 1,900 to 2,000 area in
the next 12 to 18 months.
S&P 500: This index put in a top at 1,576 level on 10/11/07/
We expect to see further erosion in this index back to the
1,300 level as consumers continue to tighten their purse
strings in 2008.
OUTLOOK FOR ENERGY:
The upward trend and continued global demand for crude oil
continues to dominate this market. We expect to see the $100
barrel level to be breached in early Q1 if not before. Once
over $100 we expect to see a rapid move up to the $110
level. Demand and cold weather in the Northeast in Q1 should
continue to exert upward pressure on this market.
Watch our energy video:
OUTLOOK FOR GOLD:
Look for Gold to make all time highs in Q1. The old high of
$850 an ounce set back in 1972 will be broken in 2008 as
nervous investor lose faith in the stock market and the
value of paper money. Look for a move to $900 and beyond in
'08.
OUTLOOK FOR THE DOLLAR
No question about it, 2007 has been a tough year for the
Dollar. It seems to me that the Dollar has been engaged in a
12 round bare knuckles brawl, and is fighting for respect as
we wound down the year. Only in the 11th round (November)
did we see the dollar begin to recover and rest on the
ropes. What surprised us most was that despite a barrage of
bad economic data and a 75 point rate cut in November and
December the dollar didn't go down for the count.
So here's how we see it in Q1 of '08.
EURO/USD: In the short term it appears that the EURO has
topped out against the Dollar at 1.4970 on 11/22. This was
pretty much our target on the upside (1.4950). We now expect
to see the EURO pullback to the 1.4200 to 1.4300 levels in
Q1. The longer term negative dollar trend would only be
reversed if the 1.4000 level was broken in Q1 of '08.
USD INDEX: This index has generally been moving sideways
since November. We are looking for a move back to the
78.00/79.00 area in Q1. This would not be a big enough move
to change the overall negative direction for this index.
USDCAD: Look for more of a two way trading market in the
early part of '08. Resistance should come in around 1.0400
for the USD and support should be evident at .9600.
USDAUD: Look for the USD to continue to improve against the
Aussie dollar in Q1.
USDYEN: We expect to see continued dollar improvement
against the Yen in Q1. We are looking for a dollar recovery
back to the 114.00 to 115.00 levels.
Crystal balls like everything else in in life are subject to
change ... with that in mind as a trader you should remain
vigilant and be aware of what will be some amazing trading
opportunities in '08.
Allow me to thank you for making 2007 our best year ever.
All of us here at INO.com and MarketClub have worked hard to
provide you with up to the minute information and the right
tools for making money in the markets. We are confident that
2008 is going to provide some amazing trading opportunities
for our users and members. We are looking forward to working
with you in the new year and making 2008 your best year
ever.
On behalf of everyone on our team we wish you a safe and
happy holiday season, and a prosperous new year.
This is Adam Hewison,
have a safe and happy holiday season.
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