General Observations

I have been reading a lot of comments by Fed officials that are leading me to believe that an increase in the money supply in the economy is on the way.   Fed officials are more afraid of deflation than inflation at this time.  An easy way to ward off deflation is to print more money.  The Fed can potentially add a lot more money to this economy by firing up the printing presses.  There is an old conventional wisdom in the stock market - don't fight the Fed.  If the Fed starts to increase the money supply a lot, more money may flood into the stock market leading to another run up in the stock prices.

Just looking at charts, I am inclined to believe that we are likely to spend some time oscillating between 9500 and 11,800 (DOW) with a possible revisit to the 7000 range in the long run.  In short, don't expect the markets to bust out into new highs anytime soon.