After the run-up in today's equity markets, helped in large measure by Fed Chairman Bernanke's morning comments, I'm raising my conditional trade stop-loss floor to 1400 on the S&P 500. Last week I had a 1380-1385 target floor in mind (see blog of March 22nd). However, today's market exuberance together with my expectation that favorable US economic data will be forthcoming over the next several days suggests to me that we could see a higher market before the week is out --- perhaps 1425 on the S&P 500. Moreover, I think institutional "window dressing" for the end of the quarter will support market prices for the remainder of this week --- although it's possible some of that "window dressing" added to today's market results.
If the market falls below 1400 in the next couple of weeks, I think it probably will be because the economic data disappointed, the market re-thinks its enthusiasm over Bernanke's comments, and/or we're heading for that proverbial 3-5% correction --- and setting conditional stop-loss triggers at the 1400 level will protect much of the as-of-yet unrealized gains in our managed portfolios.