Option Theory – Market News – Where the S&P 500 is heading..

I like to browse Google Finance when I’m in the mood for financial news including investments, mergers, failures, winners etc..

Today I caught wind of an article from Seeking Alpha with the headline ‘S&P Getting Ready To Run 2550’ – I gave it my click and read how there were several reasons the S&P 500 is going to hit 2550.

  1. The first reasoning was that the super-uber-mini-tiny crash a few days ago after the Federal Reserve notes were released – was recovered quickly.
    a: The Federal Reserve announced that they would slow down in their own buying of market securities. This means the demand for securities should at very minimum slow down; thus prices should drop at least a little. If you take a player the size of the Federal Reserve out of the market place it will contract eventually – now the definition of eventually is where most get caught.
  2. The second reasoning was that a when we fired missiles on Syria the market didn’t react.
    a: If a theory is the market is behaving really irrational – throwing another irrational behavior at that statement doesn’t work against the theory. In fact it adds to the idea of the irrational (in this case over priced market)
  3. Here is where I would add the additional reasons from the article – however after mid-way through page [2] I got a very annoying ‘give us your email – to finish the article’ popup. To be honest I am confident enough at this point in my life that no one knows the future – that I didn’t deem them worthy of my email.

Here is the link for you to get to annoyed with on page 2

I believe the market is damn near a random walk up and down each day within deviations. Some days the market will go down and other days up. There is a slight statistical skew to the upside, the market usually trends upwards of 1-3% per year.

The overall point is in my personal opinion the author has about a 50/50 shot at being right or wrong. I guess he’s taking the small skew advantage this time.

I try to make no suggestions or prediction on the market.
I have no crystal ball and trade percentage based ideas.