Here's Ryan's take:
The bottom line is a flat year next year is highly unlikely. As with anything, it could happen - but history would say be on the lookout for a big move next year. In fact, I found 22 years were flat and the following year moved at least 10% (up or down) 14 of those times. So, about two out of three times it moved double digits after a flat year.Aaron here - So we want to figure out if a big up or big down year is more likely. The two critical factors we need to consider are earnings trajectory and the chart of the S&P 500.
First lets look at earnings via Goldman Sachs chart. They expect about a 10% increase in 2016. That's bullish.
Let's look at the S&P 500 chart.
That's pretty clear resistance we're leaning up against. Pattern wise we may be looking at a rounding top. We'll have a clear read sooner or later.
My Take: If the S&P 500 can take out the 2015 high by more than a few pennies, we could be setting up for a strong 2016. Otherwise, it's not worth being aggressively bullish from a broad market view.
We also need to consider the fact that forecasting is hard. Murky global economic trends are only complicating matters. The point is, it's very important to not be blindly bullish based on earnings projections. After all, the market will sniff out the truth.