Wednesday, December 21, 2016

Seven Straight: Dow Misses 20,000 Mark Again; Stocks Slip; Fearless Rick Calls 20,000 In 2023

In what was the Dow's narrowest trading day since 2013, the widely-watched industrial average failed to ramp over the 20,000 mark. The DJIA fell on light volume, as did all other major indices, along with WTI crude, silver, gold and treasury yields.

Financials managed to hold green post-Fed but all other sectors are lower since the rate hike announcement a week ago. Speaking of lower, volume has completely dried up. Bonds got a small bid on the day, pushing yields slightly lower, the benchmark 10-year note was down 0.022, finishing at 2.546.

It was a day of reflecting on what has happened in 2016 and weighing the possibilities of the rally extension beyond the magical 20,000 number, which, in the long and short of it, is wholly psychological and largely meaningless unless one has invested heavily in "DOW 20,000" baseball caps.

This leaves managers with just seven more trading days to square their books for the year, something any smart (read: few, if any) player would have already accomplished prior to heading off for the holidays. Seven is also the number of days that people thought the Dow would breach 20,000. Something about that number...

A betting man would give good odds that the Dow won't break the 20,000 barrier this year and might get an even better shake on the Dow busting through by June of 2017, but it may be a bet worth taking. Failure of markets, especially after a long run-up and a bull market that's extremely overextended, is rather common. The chances of a pullback between now and February seem almost certain, especially beyond the rate hike and the obvious tax incentives to sell come January 3rd, the opening trading day of next year.

Since Money Daily publisher Fearless Rick has already established himself on two accounts lately (the Trump call in Ocotber and the more recent "silver under $16" post a week ago, he's ready to plunge headlong into this debate. Here's the call:
The Dow isn't going to make it to 20,000 this year, and it won't make it by June of next year. In fact, it may not hit 20,000 until 2023. Book it.

Obviously, our intrepid publisher is going out on a limb rather than risking one. He's currently long machinery and undeveloped real estate. Yikes!

At The Close, 12/21/16:
Dow: 19,941.96, -32.66 (-0.16%)
NASDAQ: 5,471.43, -12.51 (-0.23%)
S&P 500: 2,265.18, -5.58 (-0.25%)
NYSE Composite: 11,142.57, -29.62 (-0.27%)

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