Dow Continues to Climb

Since hitting its low on March 6th, the Dow Jones Industrial Average has put in an impressive 32% return. The above graph illustrates the intensity of the Dow's breakout of its descending wedge pattern over the last eight weeks. Many were calling for a total breakdown to the 5000 level, or at minimum, a retest of lows. These "gurus" actually MISSED this huge rally! Many of the big money managers were scrambling to "get in on the action." Some were still heavily positioned in cash into the second quarter of this year and are only now getting back into equities.

The recent announcement of the "favorable" bank stress test results this week added some momentum to this market climb. Now many of the economic indicators are actually showing an end to "The Great Recession of '08" sometime before the end of 2009. Further it seems that the declared bankruptcy of Chrysler and possibly GM has already been factored into the market. We have definitely shifted away from a "fear mentality." The market is now looking ahead toward post-recession earnings. There are still some great stock buys out there!!!

Don't be fooled by the seemingly Alice-in-Wonderland, topsy-turvy nature of this market where up-is-down, and down-is-up. The market has telegraphed many technical signs as to where it is going. The challenge is to filter out all of the daily "noise." With its latest advance the market is moving toward the 9000 level-- this would be a conservative 40% retracement from its last leg downward. There is an intermediate moving average line at 9242 which should provide some heavy resistance on upward momentum.

This has been a great opportunity to book solid profits for 2009! Stay tuned to the Marketdoc Report for the latest news and market updates.

Note: The above is for information purposes only. Any decision to buy, sell, or hold any specific investment for a person or portfolio should be reviewed by your personal investment professional.