Over these past few months we have seen the Dow Jones Industrial Average approach the 9000 level since hitting its low of 6478 on March 6th. It set an intra-day high on June 11th just below 8900... pretty close to our target of 9000... and in stark contrast to those who were telling everyone to "wait for the bottom." By any standard this powerful 37% rally was impressive and offered tremendous trading opportunities. The average stock market return for an early economic recovery period like the present is about 36%. We are well within this range.
The past three weeks have shown the Dow trading sideways with some downward momentum. Where is it headed? Unless there is some catastrophic news out there, we should see this sideways pattern continue until the fall season to finish out our top. Markets seldom move straight up or down. Volume can be light during the summer months which can offer some interesting movement, in either direction. Overall the 50 day moving average is at 9045. I expect to see some good trading opportunities over the remainder of the summer as the market, and investors, sort things out with our economy, the bank crisis, world news, etc, etc.
Writer's note: I have been developing a concern that our way of thinking in this country is moving away from the free enterprise and more towards a socialism. We no longer live in an environment where we should 'ask not what our country can do for us' to paraphrase President Kennedy. Now it is more like 'what can my country do for me?' Free enterprise is what has made our country great. If we take away free market incentives, those of us left with jobs will be part of some nameless, faceless beaurocracy that offers no reward for outperformance. I will specifically be focusing on our quest for "National Healthcare Reform" and my concerns if we go to a socialized system. Make no mistake, an 8 hour wait in the Emergency Room will be the norm.. and forget about having that knee or hip replacement done anytime soon. I will write more about this in upcoming Marketdoc Reports. Stay Tuned.
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