Good Omens for '08 as Market Sentiment Improves
Sentiment Friday is much improved after yesterday's market bruising, and stocks just might be setting up for a strong exit out of 2007 and a positive move right into the New Year.
This morning, Kevin Ferry of Cronus Futures Management told CNBC that the fact that the S&P March futures contract dug in last night and bounced above 1492 -- after yesterday's trouncing -- is a positive, and may even be a good sign for the year ahead.
The contract was fluctuating this morning, but was holding above that level ahead of the stock market open.
"But to get a more positive tone, you'd like to see the market settle above 1492" for the year. "That's what we see as the line in the sand, and that's the level. Above it we're constructive. Below it, not so much. For the year end I think it's meaningful for the tone of the market," he told me after his appearance.
The way the futures responded after yesterday's selloff is also a positive sign, he says: "We had a rough session. Here, it found buyers down. Given the low volume, it could have been worse. You could have seen something extreme happen and it didn't happen."
"You're still getting the S&P representing better value in a market that's volatile... [U.S. stocks] might end up the best out of some not so pretty choices" next year.
Ferry's comments about next year echo those of others in the last couple of days.
Tobias Levkovich, chief U.S. equity strategist at Citigroup, told CNBC yesterday that institutions he surveyed have a positive view on U.S. stocks for next year.
And last week, Merrill Lynch's global fund manager survey showed the U.S. market to be a place where managers want to put money to work in the next 12 months -- and that they are becoming more wary of once-hot European equities.
So just maybe it will be a happy New Year for the U.S. stock market -- though you can bet it will be a volatile year. We'll talk more about the outlook all day on CNBC.
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