All Entries Tagged With: "Dow Jones Going Up"

Why the Dow Jones Will Continue to Rise?

When is the Dow Jones going to Peak?  I believe it won’t be anytime soon.  Back on October 31st, I wrote an article The Dow Hits 10,000: Technocals Show the Earnings Rally will Continue.  Since then we have seen the markets soar around 900 points.  I am now hear saying that we will continue to see the indexes rise.  Why do I believe this?

1. Earnings will continue to be strong as more and more companies find a way to succeed despite the hostile economic climate.

2. Emerging Markets will soar due to strong currencies and increased exports/commodity use

3. Banks will rally leading a surge in the whole market.

Adding to this technicals show that we are currently trading in a bullish market as the 50 day moving average is trading well above the 200 day moving average platform.  I believe we can continue to fuel this rally.  The sectors that I like the best are: Oil, Engineering/Infrastructure, Banks, Emerging Markets, and Retail.

The Dow Hits 10,000: Technicals Show the Earnings Rally Will Continue

The Dow Jones topped 10,000 yesterday!!! First time since October 2008. Can you say we are on a rally? Only in March the Dow hit a 7-year low near 6,500 now popping 53% in a year. Big news? I think so. We have watched the DIJA go back and forth throughout this decade crossing this magical line many times. The question now is will it stay? Many folks are skeptical claiming that the bulls are running to far ahead of themselves. The markets right now are leading the pack and many people are scared that the economy is still in disarray, unemployment being the big issue. In this case, we are looking at the stock market being the leading indicator with unemployment being the lagging indicator. Throughout time the market has always traded six months ahead of a healthy economy whereas unemployment is usually six months behind. This being said the market is telling us come March we should see the unemployment rate start to fall. So with this all said, what’s next for the markets? In this case I think the Technicals are in our favor. I think 10,000 will become a support level and history backs me up. In the past, when the Dow has traded near 10,000 it has stayed there for many months, sometimes even years. Look at the graph below for proof. (The circled spots show where the Dow traded over 10,000 and for how long showing the support levels exist)

I think the Dow can trade up to 10,300 in the next month and a half being carried by both earnings reports and technicals. For one the 50 day is trading over the 200 day Moving Average indicating we are in a Bullish run. Plus with Goldman Sachs, IBM, and Google (Read this article on GS, GOOG, & IBM’s Earnings) all set to blow analyst out of the water this week, what’s going to stop the rally? I say nothing, ride the rally and don’t be too scared to jump back in the markets as if you don’t you will just miss out on the gains.