I have not made any short-term predictions for 2011 due to very murky waters...until today...so for entertainment purposes only, here's the prediction:
The Dow will close 2011 at 13,000 or above. That's about a 16% climb from today's 11,200 area.
Enjoy.
And gold will probably at least match that. Fed money printing to inflate assets is not the same as a healthy economy.
excellent logic wrote:
And gold will probably at least match that. Fed money printing to inflate assets is not the same as a healthy economy.
1) As I always have to state when I make such a prediction, I didn't say the economy was healthy.
2) I guess you are banking on The Fed doing QE3? I'm not sold on that happening.
3) You saying gold will hit 13,000 an ounce, or saying it will rise 16% by year's end? Hopefully the latter. I'm not about to predict the price of gold as it is clearly driven up by the Dale Gribbles of the world, and I don't pretend to understand them.
Maybe so, but 2012 is going to shit the bed...won't be back until late 2013.
Don't ask me the reason - Suzie Orman says so.
If the Dow hits 13,000, then we'll be seeing the Dale Gribbles of the world.
Like you said, if the economy isn't healthy, wouldn't a 16% rise be stupid? Hence, Dale Gribbles.
Sure the DOW could be at 13k or above, if Gold is around the same number at the same time. I'm expecting Gold and the DOW to meet at some point, doesn't matter if 4k or 8k or whatever.
splits wrote:
If the Dow hits 13,000, then we'll be seeing the Dale Gribbles of the world.
Like you said, if the economy isn't healthy, wouldn't a 16% rise be stupid? Hence, Dale Gribbles.
Not healthy, but there was TOO much of a pull back, and it has enough strength to get to 13,000 be end of December.
I predict the Dow will end the year below 11,400. I have a December put on the SPX that requires about a 10% decline to be in the money, so I am hoping you are wrong. I sold a lower strike price contract on the last big down day, so I'm guaranteed to break even, but I still like the insurance policy as I'm more concerned about Europe or banking dragging the market down from current levels.
It would be a 16% rise if you think right now is the true value of the market.
It was nearly at 12,900 just a little while ago so you are talking about a 1% gain on this year's high.
Or a 2% gain on the value before the slide going into the "debt ceiling crisis" and panic selling that ensued.
I think Flagpole is just betting that this last month was just a bunch of fear driven sell-offs and things will return to where they left off once that settles down.
Or the fear could renew.
The health of the companies that compose the Dow seem to be doing OK, mostly.
I'm not making a call on this but would like to see it go over 12,000 since I sold when it was at 12,700 and bought back in at 11,800.
the market's been overreacting to the news when corporate profits have been strong and growth continues, albeit slow growth.
The sell-off had little to do with panic over the debt ceiling crisis. Or the downgrade of US debt. In fact the sell-off hasn't really been panic-driven. The sell-off is a function of a legitimate re-appraisal of prospects for growth in the US economy. Much of the rally in the 1st half of 2011 was under the pretense of the US economy continuing to grow moderately in the 2-3% range. When investors realized that growth had slown to 1% in the 1st half of the year and is showing little signs of accelerating they adjusted stock prices lower accordingly. You can't be intellectually honest and say that the US economic picture doesn't look more bleak now than it did when the Dow topped of at 12,800 in July. Throw in the the sovereign debt crisis in Europe which has the potential to further negatively impact the US economy and the sell-off of the past month makes a lot of sense. The only way we get to 13,000 on the Dow by year-end is for the US Economy to suddenly accelerate out of its soft patch and significantly surprise to the upsize. That is a low probability event at this point.
X-Runner wrote:
It would be a 16% rise if you think right now is the true value of the market.
It was nearly at 12,900 just a little while ago so you are talking about a 1% gain on this year's high.
Or a 2% gain on the value before the slide going into the "debt ceiling crisis" and panic selling that ensued.
I think Flagpole is just betting that this last month was just a bunch of fear driven sell-offs and things will return to where they left off once that settles down.
Or the fear could renew.
The health of the companies that compose the Dow seem to be doing OK, mostly.
I'm not making a call on this but would like to see it go over 12,000 since I sold when it was at 12,700 and bought back in at 11,800.
Mr. Johnson wrote:
Uh, that's the definition of panic selling.
How is that panic selling? Those are concrete reasons. If sovereign debt blows up it will be another financial system game changer. Everything is always good until it isn't. Even if it doesn't blow up, deficit reduction has the very real potential of griding world economic growth to a stop. Current earnings aren't the be all end all.
You may be right that the drop was a re-appraisal of prospects for growth in the US economy.
But the drop happened to start 10 days before the debt ceiling deadline and dropped every day when no deal came through until August 2nd when it was settled.
There was a slight bump up then.
Then any negative economic report became a headline and stocks would drop.
Then there would be a good report and stocks would jump up a bit. More downs than ups as the Dow dropped another 1000 which seemed to coincide with the rating downgrade and any European news.
I think there would have to be some pretty good news coming out to get it up to 13,000. Momentum could carry it pretty far.
13,000 is possible. I could see it closing below 10,000 at year end, too.
I do not see the Dow as an indicator of how the economy is doing. The swings are too quick and too driven by emotion. That's why we don't know where it will go.
Flagpole wrote:
I have not made any short-term predictions for 2011 due to very murky waters...until today...so for entertainment purposes only, here's the prediction:
The Dow will close 2011 at 13,000 or above. That's about a 16% climb from today's 11,200 area.
Enjoy.
We will be lucky if it is above 11k... like I said before.
Kevin52 wrote:
Flagpole wrote:I have not made any short-term predictions for 2011 due to very murky waters...until today...so for entertainment purposes only, here's the prediction:
The Dow will close 2011 at 13,000 or above. That's about a 16% climb from today's 11,200 area.
Enjoy.
We will be lucky if it is above 11k... like I said before.
I've made my prediction and now you've made yours. We'll see who is closer at the end of December.
flagpole, I'd be curious to hear your reasoning behind this prediction?
ericAvery wrote:
flagpole, I'd be curious to hear your reasoning behind this prediction?
Things this fall are SIMILAR to last fall when I called for a 10,400 Dow to hit 12,000 by years end (something I was wrong about by 16 trading days). After a couple weeks of serious volatility, things will settle down into more of a normal pattern.
First, you have to start with the norm, and the norm says that the markets go up from September to December. Not every year of course, but on average they do.
Second, Buffet just bet on Bank of America. That's huge for BOA and of course the Dow. Buffet is often ahead of the curve when calling a bottom (which I think he's done here), so it's possible the 13,000 won't hit until April 2012, but for fun I'm calling it December 2011.
Third, you can find lots of "experts" who have called for a Dow of 13,300+ by year's end who have stuck by that prediction, so I'm being more conservative than they are.
Fourth, it's just fun my brother.
ericAvery wrote:
flagpole, I'd be curious to hear your reasoning behind this prediction?
Also, companies remain strong. The stock market is undervalued right now.
Actually, Flagpole, over the last 50-60 years, August has been the worst month of the year. In down years since 1950, on average both August and September have been down months. The January effect doesn't get started until November (used to be December). So you may be in for a little ribbing for another month or so (also like last year).
I'm not short (and argued against selling in the "Stock Market Sell Signal" thread) but the market may be weaker than you might like for a while.
It still looks like a correction, though. I'll see your measily 13,000 and raise you 2,000 (but at the end of next year, not this year). Looking for a very strong 2012 (Elliott 5th wave off weekly charts from the 2009 low).
Correction: In the last 50 years, September has been THE weakest month, but the whole August-October period has been weak.