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Forget Dow 10K—S&P 1,000 is New Support Level: Strategist

Some investors wonder whether the Dow 10,000 has become the new support level. Additionally, the CBOE Volatility Index (the VIX), widely considered the best gauge of fear in the market, dropped to just above 20, the first time since August 2008. Jerry Webman, senior investment officer and chief economist at OppenheimerFunds, and Mike Rubino, president of Rubino Financial, shared their market outlooks.

“The problem with the Dow that it’s 30 stocks and it’s so vulnerable to what any of the 30 will do,” Webman told CNBC.

“Let’s look at the 1,000 on the S&P—I think that’s the new support level. We’d have to get some surprises in major companies' earnings, in central bank preemptive action or some other geopolitical problem to break us back below 1,000 on the S&P.”

Webman said we currently have low interest rates, lots of stimulus, pent-up demand and global demand, so “we’re going to continue to see major domestic stock indicies continue to creep forward.”

Additionally, he said we’re going to see more growth internationally.

But Rubino believes the low VIX level merely suggests that there are too many people on the bullish side, which is a contrary indicator.

CNBC Data Pages:

“[Markets are] going to drift sideways to slightly higher possibly, but we really think all the risk is on the downside because of the economic conditions,” he said.

“If we look out three months, we’re expecting maybe a 10 percent increase, but we think all the indicators from the fundamentals of the economy suggest that we’re going to head lower sooner than later.”

Rubino said this economy will not go any further without consumers—especially the baby boomers.

“The baby boomers became savers, not spenders and they’re the biggest generation—they’ve affected everything in this economy for the last 50 years.”

More Market Intelligence:

Rubino Likes:

iShares MSCI-Pacific ex Japan

iShares MSCI-Emerging Markets

Claymore/BNY

Webman Likes:

S&P Technology

S&P Consumer Staples

iShares MSCI Emerging Markets

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Disclosures:

No immediate information was available for Rubino or Webman.

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