chart courtesy of www.realtimestockquotes.com
This market continues to show signs of a continuation of the rally which started in December 2012 at about the 12,500 level. The daily chart seems to show the makings of a head and shoulders top. However this is not seen very well on the weekly chart. We can expect the rally to continue through spring for the traditional "sell in May, then go away."
Here are a few reasons why this market will continue to rally:
1. Earnings have started to come in weaker for some companies. Economic growth forecasts have been revised downward. This will neutralize any chance of the Fed tapering its policy of printing money.
2. The Fed has NO CHOICE but to keep the liquidity faucets running. If it begins to taper the whole "house of cards" will come down. The borrowing and printing of money to keep servicing our national debt will some day be known as one of the biggest pyramid schemes. This column wrote about the documentary titled, "The End of the Road: How Money Became Worthless" where this policy is explained in very simple terms. Everyone should watch this great documentary. You can order a copy from amazon.com at the following link.
http://www.amazon.com/s/ref=nb_sb_ss_i_0_16?url=search-alias%3Dmovies-tv&field-keywords=end+of+the+road+how+money+became+worthless&sprefix=end+of+the+road+%2Cmovies-tv%2C303
3. Many Dow stocks are still paying 2-3% dividends. These companies are more stable than most banks. This is better than most of the longest term fixed income investments which are available.
The above information is for educational purposes only. Any decision to buy, sell, or hold, any specific investment for your portfolio should be reviewed with your investment advisor.
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