The High Probability Outlook for 2012

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2012 Outlook
By Simon Maierhofer | ETFguide – 2 hours 12 minutes ago
Investors are more uncertain about the stock market's future today than at any other time over the past six years.
The outlook for 2012 doesn't look good. Only some version of QE3 and more aggressive ECB intervention can mask up the technical damage visible on all major charts.

The rally from the October lows is still within the confines of a counter trend rally and has yet to move above common Fibonacci resistance and two major trend lines.

Short-term December/January Outlook

The Dow Jones and S&P have managed to exceed their early December highs while the Russell 2000 (Chicago Options: ^VIX) and particularly the Nasdaq (Nasdaq: ^IXIC - News) are lagging behind.

The euro, the driving force behind the early 2011 stock and gold (NYSEArca: GLD - News) and silver (NYSEArca: SLV - News) rally, is remarkably weak and has not confirmed the S&P's recent strength.

It seems like the generals (S&P and Dow) are marching ahead while the troops (Nasdaq and euro) are following behind. An army in disunity can't conquer and a fragmented market is a weak market.

Seasonality may push stocks a bit higher but the seasonal tailwind will calm significantly in early 2012. Sentiment is once again turning bullish (a contrarian indicator) and technicals are looking weak. It seems like another high probability set up (like in May and October) is in the making.

The ETF Profit Strategy Newsletter provides a short, mid and long-term forecast along with the target level for this rally and the support - that once broken - will usher in the next leg of the bear market.