Time for an Iggy Call

It's that time boys and girls... time for Iggy to make a prediction....

The markets have had 3 very good weeks in a row. Positive weeks which hasn't been seen in quite some time. The party is going to take a break though. Another up day Monday, possibly carrying into Tuesday, but end of month (also the end of the quarter) marks the end of the party for now. Keeping in line with the 2 steps forward 1 step back, it's time for the step back.

The S&P will peak around 835-850 and then approximately a 15% pullback that'll take a couple or few weeks to take place. That will take us back to around the 710-730 area (very approximate target). The drop will be enough to scare people into thinking we're headed to new lows, but it shouldn't actually happen.

Then we're off to the races. The "bull market" will begin. There will be dancing in the streets, cheerleaders on CNBC predicting the worst is over, the world is happy again. I know I keep repeating myself but please don't fall in love with it. It'll look wonderful, it'll feel great to get some of your money back. But we won't come close to where we were in October 2007.

Hope for the best but prepare for the worst is all I'm saying. Be prudent, be a bit skeptical, be nimble, pay attention to the data, not the cheerleaders. By playing it safe and smart from here on, you can be ahead of the game.

When I say pay attention to the data, I mean read the news. The real news, not the cheerleading news. Here is an example. Sure, some things are speculation, but once you find some sources of information that have been proven accurate (such as Meredith Whitney), listen to what they have to say and make your own assessments.

http://seekingalpha.com/article/127937-credit-card-crunch-creating-a-new-generation-of-subprime

And lastly, a chart of the "Four Bad Bears"... the worst 4 bear markets in history.

http://dshort.com/charts/bears/four-bears-large.gif