Bullish on US, see Santa Claus rally ahead: Richard Ross

The Dow and the S&P 500 advanced modestly on Friday. The S&P 500 ended up a mere 0.1 percent for the week. The benchmark index is just 3.8 percent below the 2012 intraday high of 1,474.51 reached in mid-September. Non-farm payroll was far more than expectation.

Richard Ross, global technical analyst at Auerbach Grayson is very bullish on US. "I think we are setting a stage for strong finish to 2012. I think this is just a pause before one final year-end Santa Claus push," he adds. Wall Street week ahead: 'Cliff' worries may drive tax selling Below is the edited transcript of his interview on CNBC-TV18. Q: What do you make of the impasse of the fiscal cliff talks, not unexpected at all? Expected that it will go down to the wire, but earlier this week Tim Geithner, in a series of interviews, said that if the Republicans did not accept a hike in tax rates for the top two percent of the economy then there was no deal and that the Democrat or White House was okay with walking over the fiscal cliff. A: I think one thing, which we all can agree upon, is that if we walk over this cliff, it’s going to be disastrous in the short-term for the market. I do not think we go off the cliff. If the market takes action, it is telling you that we are not going to go off that cliff. This is not a certainty, but the price action in the United States has been very bullish, not just in US, but on a global basis. It reminds me of what was going on in India earlier in the year, the circumstances were different, but all we heard about was rising inflation, a weaker rupee, policy paralysis.  Meanwhile, the Nifty is at 28 percent on a year to date basis. It’s a star of the global equity markets. I think you are seeing the same thing. The headlines are saying one thing. That’s exactly what happens time and time again, it gives people a pause, a reason not to be in the market. But yet the smart money has been put to work and they are participating on the upside. Q: What do you make of the jobs data that we have seen? It is better than expected, do you believe that will bring some investors back into this market? A: I think you will get some people back into the market as prices move higher. It is going to pull some people off the sidelines. There is a lot of scepticism and a lot of doubt about these numbers. The big hurricane, which we had in the North East, is testing some scepticism upon the lower numbers, people looking for revision. So, once again it is a push and pull. We saw the good jobs number tempered by those lower sentiment numbers. I think investors are looking at this market and they are saying 2013 is shaping up to be a lot better than we thought it was going to be just a couple of months ago. _PAGEBREAK_ Q: Where do you think we will end the year? A: The 50-day moving average currently stands around 1,418 or so on the S&P. We haven’t been above 50-day moving average now on a closing basis, going back since the beginning of November. I think that’s going to set a stage for a mover higher. I think if we take out 1,420-1,425, you could see a fast move up to 1,450 area. So, we could take on another couple of percentage points. I am very bullish on US. I think we are setting a stage for strong finish to 2012. I think this is just a pause before one final year-end Santa Claus push. Q: What is going on with Apple? A: The volatility is really picking up in this stock. There is no margin for error, when you are the biggest company in the world, which Apple had become at one point in time. If I am not mistaken, it was trading up around USD 700 a share. Keep in mind that they get almost 70 percent of their revenue from one product—the iPhone. It’s a great phone, but the competition is closing fast. A lot of the gains, which we had seen in Apple, were due to this global expansion moving into China. We see this week Nokia is stealing a little bit of their thunder. Nokia, everyone has forgotten about those guys, now they have got the head to start in China, a pretty big market. So, Google, Android platform are stealing some of their thunder in the Tablet space. Two-three years ago Apple was the only name in town, now its now. The competitors are picking up steam. Apple still is the leader, but competition is increasing. This is tough for Apple in the short-term.