Stock market putting in a major bottom for the year now in January

I predict that the stockmarket is putting in a major bottom for the year right now. While Jamuary could end up "flat" relative to where the market finished off in December (S&P 2043), these deep lows that we are seeing now should be bought without question.

There are three reasons.

First, we will soon be entering into what is seasonally, the most powerful fiscal time of the year, where fiscal injections skyrocket due to tax refunds. Last February saw nearly $460 billion of net spending in a sigle month. Huge. This is highly supportive. The market rallied 5.5% and 8% the year before when there was also $460 billion of injections.

Secondly, everyone is selling for all the wrong reasons. They don't udnerstand what's happenig in China, the transition of that economy from an export driven model to one of domestic consumption. This takes time and it's disruptive, but it's also a long-term positive. The volatiltiy, lately, is realy due to the Chinese authorities messing around with stupid, Western-oriented economic ideas, currency manipulation, monetary policy, etc. However, as we showed here a couple of weeks ago, Chinese gov't spending is surging. That's ultimately very supportive.

Finally, the U.S. economy is doing pretty nicely. We saw the jobs numbers today. They were way better than expected. Employment and withholding taxes collected by the Federal gov't are surging, giving no indication that the job market is topping out.

I'll even throw in a fourth reason, which is something that I don't usually pay attention to, but some people do. The deficit is growing again. That's right, for the first time in six years the deficit is expanding. I wonder what some people will say?

Anyway, that's my forecast.