Jeffrey Hirsch Advises to Beware the Slides of March

By on March 2, 2012

Stock market historian Jeffrey Hirsch of the Hirsch Organization and editor of the “Stock Trader’s Almanac,” was interviewed on Bloomberg T.V. regarding his outlook for the stock market. Hirsch is also the author of Super Boom: Why the Dow Jones Will Hit 38,820 and How You Can Profit From It.

Hirsch compared the current market pattern as similar to 2010. His said this lines up for a mid-March sell-off.

Hirsch didn’t think the weakness would be a “nasty downturn,” but a chance to buy the dip. He added it would be a typical downturn with “triple witching” coming up.

When asked how high the oil market would have to go before it hurt the stock market, Hirsch replied it would help the oil stocks. He added $150 a barrel could be painful, but we’ve become accustomed to oil at these levels now.

Hirsch said the low volatility we see now is typical in a bull market, noting there was a lot of volatility last year and we “went nowhere.”  Hirsch felt we still have some upside here, but not a lot.

Hirsch was asked if the warm winter, as it affects homebuilders, homebuilding companies and retailers, would play into his predictions. Hirsch said he doesn’t believe weather has as much of an effect on the stock market as human and social repetitive behavior does. He acknowledged that wheats and other commodities were affected by the seasons.

The interview continued with Hirsch discussing further the reasons stocks could see some weakness in the near-term (end of quarter selling, asset liquidation to pay tax bills, a pattern of March sell-offs in election years), what the market’s performance means for incumbent Barack Obama’s  re-election odds, the effect of low volatility on investor complacency, what year four of the presidential cycle has meant for stocks (a modest positive), and what happens the year after an incumbent wins.

 

In the following video, Hirsch explains why we’ll experience a “Super Boom” in stocks.

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