S&P 500 to 2250 minimum, maybe higher if the grind takes more than a year.
From StockCharts, September 5, 2015:
This Bearish Story Might Be Fiction
There are plenty of technical analysts calling for the beginning of a bear market after the past couple weeks of heavy volume selling. I'm certainly open to that possibility as I always respect price support breakdowns with accelerating volume. But the story behind the scenes isn't making a lot of sense and doesn't support that line of thinking. Typically, we see money flow away from aggressive sectors on a relative basis (vs. the benchmark S&P 500) before the plunge begins. The weakness recently, however, has been focused more on energy, materials and defensive groups, which is just plain odd. Bear markets can come in all shapes and sizes so I will definitely respect what's happened, but at the same time I will not be shocked if we magically resume the six year bull market once September is behind us. Compare how the aggressive sectors acted relative to the S&P 500 prior to the 2007 top to how they're acting now:
In 2007, both consumer discretionary and financials performed horribly BEFORE the S&P 500 topped. In other words, much of the smart money began rotating away from aggressive areas of the market prior to the recession that followed. And technology performed very poorly on a relative basis when the S&P 500 took its initial drop beginning in October 2007. Now fast forward to 2015 where we see consumer discretionary outperforming on a relative basis. The only true blemish with respect to the relative performance of aggressive sectors was a slight relative breakdown in industrials. A bear market generally tears apart aggressive areas of the market because those sectors are laden with high PE companies that typically free fall as PEs contract and GDP turns negative. The stock market always anticipates economic strength and/or weakness before it occurs....MOREEarlier today:
The One Market Sector That Really Matters Right Now (XLF)