Showing posts with label financial press. Show all posts
Showing posts with label financial press. Show all posts

Tuesday, February 6, 2007

Dull and Duller but Prepare for Launch to 20,000

If you thought yesterday's market action was about as exciting as ice fishing, then today's minuscule moves must have you itching to watch paint dry. Though volume was moderately better than Monday's, the markets barely budged, though all three major indices managed to post in the positive column.

Here's the exciting news: the Dow jumped a whole 4.57, the NASDAQ erupted 0.89 to the upside and the S&P 500 surged (word of the week) 1.01.

Wow! Don't cash out your 401k just yet.

Investors seem to be somewhat anxious about making any notable moves, even though the market continues to point towards a higher future. And I think that's where it's going, though I'd be remiss to predict just when this move will take place.

Normally, I'm bearish at times of little activity, but the US economy, despite complaints from wage earners and middle managers alike, is about to embark on another hyperbolic swell not seen since... well, 1999.

The 2000 mini-crash is now nearly 7 years in the past. That flop didn't exactly stop people from investing, nor did 9/11, the currency malaise, the inverted bond scare, the housing boom-bust cycle or any other nonsense the Fed or the financial press can dream up.

Truth be told, this market looks very much like the one we had in the early 90s. There's a ton of money itching to be invested and the risks are spread like no other time in our history. Companies populating the NASDAQ, NYSE and S&P 500 include the biggest and best global brands, emerging titans and a bevy of companies spinning off profits quarter after quarter.

The direction of the market is not really in question, but when the market will move is still undecided. This lull is a good indication that many stocks are consolidating and about to make another monster move forward. This quarter will probably be a great time to invest because the big move will be later this year and through 2010.

There's simply too much money with no place to go but into stocks. Whether or not stocks are a safe investment should be a topic for another day. Right now, it's time to enjoy the ride because it's going to be a really good one. Yes, there will be bumps, but the US economy is percolating at a very healthy rate and companies are brimming with cash.

The Dow is headed to 20,000 before the end of 2010. It's going to start slowly, but even a 6-7% increase this year will provide a solid base.