2016 Market Outlook

My market outlook for 2016 is fairly simple. From a technical perspective, the charts for all market indices are in dire straits.

Short-term outlook - The S&P 500 is down 8% in the first two weeks of the year, which is the worst start in history. However, the market is currently very oversold. Thus, I'm short-term bullish and predict a short-term bounce until the end of January. Also, I expect that oil prices will also rebound in the next two weeks.

Intermediate-term outlook - Although it will be painful, I predict that we'll be in a formal bear market - with a decline of at least 20% to S&P 1708 - within three months (by April 15, 2016). After a short-term rebound, oil prices will likely continue a sharp decline to the range between $18 and $24 by April 15.

Long-term outlook - Based on market weakness, I expect economic conditions to deteriorate with a possible recession on the horizon. The S&P will likely decline to 1575 before the end of 2016, with a year-end target below 1750. In addition, I predict that oil prices will find a solid bottom in the first half of 2016. After that, oil prices should recover to some degree in the second half of the year.