Dow Jones @12666 - Ominous?

[Uncle Festivus]

Couldn't help but notice the final closing figure for the DJIA today - 12666. Is this an ominous sign of things to come (---insert twilight zone music here---)???
Seriously though , I reckon the Dow is running out of puff, with the last few sessions showing signs of a very tired market, with decreasing volume confirming this, and a possible head formation after the left shoulder from the first half of this year. Come end of reporting season what drivers are there to propel the US market higher??

 

[Uncle Festivus]

Looks like 12666 was a peak so far, short term down trend, where will it stop?. Another down night tonight will confirm the short term bear. Next support 12540 maybe?

 

[wayneL]

Will the cavalry arrive tonight? (i.e. @sshole dip buyers)

I'm betting yes. (Shear punt)

 

[pacer]

The SS says it might rally and break all highs again......but I recon we are gonna feel a big pinch soon after if it does.....get ready to pinch some $$$....CFD trading rules....lol

 

[Uncle Festivus]

Well it looks like the Dow will be lower again today, but the volume throughout this 'bull' is still fading away. Another shock like the sub prime loans right-off will be enough to tip the balance. I've gone short the indexs & the rest is cash.

 

[Uncle Festivus]

Ooo creepy (probably means nothing at all )

 

[noirua]

Ooo creepy (probably means nothing at all )

Don't the numerals "666" have to be on their own?

666 talents of gold and the great beast a revelation maybe.

 

[drillinto]

The US stockmarket is 20 to 25% undervalued
Read on
::::::::::::::::::::::::::::::::::::::::::::

Monday Morning Outlook

Dow 14,000 Remains on Tap
Brian S. Wesbury; Chief Economist, First Trust Advisors, Chicago, USA
Robert Stein, CFA, Senior Economist
Date: 4/23/2007


With the Dow Jones Industrial Average very near 13,000, the title of our January 4, 2007 Wall Street Journal Op-Ed - "Dow 14,000 on Tap" - no longer elicits wide-eyed reactions, like it did a few months ago.

The skeptics became even more emphatic after the sharp drop in equity prices that occurred in late February and early March. At that point, some were even talking of a new "global bear market," caused at least partly by a recession in the US.

But the US stock market, and much of the globe, has reversed course and boomed. The Dow Jones Industrial Average climbed to a new all-time high last Friday, and is up 7.6% from its recent bottom on March 5, 2006. During this same time frame, the S&P 500 jumped 8.0%, while the Nasdaq rose 7.9%.

While it's impossible to explain every zig and zag in financial markets, the recent run-up seems to be based on strong reported earnings and clear evidence that the economy is not falling into recession, as many feared.

On the earnings front, through Friday, 134 of the S&P 500 companies had reported. The results are interesting. So far, 66.4% of reporting companies had positive earnings surprises - a nice improvement from last quarter. While earnings growth has slowed to just 5.2% on a year-over-year basis, all the positive surprises suggest analysts are underestimating both micro- and macro-forces.

The micro-force is productivity growth, as companies ride a wave of new technology. At the same time, there are two important macro-forces. First, global growth is on a tear as capitalism and freedom spread. Second, the US economy refuses to be toppled.

Pessimists continue to argue that productivity growth is slowing, or will slow for good very soon. But the technology boom continues. And while it is true that productivity growth has waned in recent quarters, this appears to be driven by slightly weaker GDP growth due to a housing correction. Employment growth remains robust. As in 1995, we expect this slowdown to be temporary. The negative impact from sub-prime foreclosures is overblown.

Moreover, the global economy is experiencing its fourth year in a row of spectacular growth. Given the international focus of many US companies, this global growth is boosting returns even while the domestic economy slows.

Finally, our models - based on overall corporate profits and a conservative estimate of the current discount rate - continue to show that the broad US stock market is 20 to 25% undervalued.

Tax rates remain low, Fed policy is still accommodative, global growth is strong, and technology remains a major force. As a result, corporate profits and economic activity will continue to expand more rapidly than conventional wisdom predicts.

While tempted to raise it, we will stick with our original forecast for now. Dow 14,000 remains on tap.