The S&P 500 bounced back in early Monday trading, and it seems not even the weakest jobs report since 2010 can derail the U.S. stock market. Citi analyst Tobias Levkovich is among those who believe the S&P 500 is likely headed higher long term, but he urges traders not to kid themselves when it comes to downside risk.

“Selectivity will remain key in 2016 as it was in 2015 with a preference for large caps, value and higher quality.”

11 Risks

Citi sees 11 risks to the S&P 500 currently:

• 1. Valuation is perceived as lofty.
• 2. Credit conditions, especially in high yield, have worsened.
• 3. An alleged “industrial recession” is underway according to ISM, durable goods orders, etc.
• 4. The energy “tax cut” benefits do not seem to have come through.
• 5. Employment data is a lagging indicator.
• 6. Commodity prices and Transportation stocks are signaling a downturn.
• 7. Revenue trends have been lackluster, raising growth questions.
• 8. Margins have slipped already and could get worse from here.
• 9. The Fed and the stronger greenback could weigh on stocks.
• 10. China (and other emerging markets) remains a question mark.
• 11. Corporate spending has been focused on buybacks and not capex.

Despite all the risks, Citi remains…

Click here to continue reading

Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!