I don't remember for sure, but I think my vote was "Above $9K". I see my original comment call was for mid $9K-lower $10K range, which appears to have been a solid call. At this point, I see no reason The Dow will not break through $10K, probably within the next few trading sessions, retreat a bit under profit-taking pressure, crossing back-and-forth a few times, then finish the year above $10K.
One or two-day swings on "Threats" are really meaningless. Market performance Year-To-Date compared with Market Performance 2-Years-To-Date, 5-Years-To-Date, 10-Years-To-Date, 20-Years-To-Date, and 50-Years-To-Date indicate the current upward momentum not only is solid but accellerating. Coupling that with the consistent positive movement of market indicators, now including even upticks in employment and downticks in unemployment claims despite astounding concurrent productivity gains, along with substantial recent increases in capital investment, consumer sentiment, and overall construction, and the fact that every "revision" over the past 3 quarters (of which there have been many) has been positive, leads to no conclusion other than that there is yet excessive pessimism. The Economy is growing faster, more broadly, and more sustainably than most folks realize.
Now, see, this is what I'm talkin' about:
Stock sales by top U.S. corporate executives reached their highest level in more than two years in November, a bearish signal at a time when the stock market has surged amid strong growth in the economy and company earnings.
Last month corporate executives cashed in $4.5 billion worth of their own companies' shares, up 43 percent from October and nearly double the five-year monthly average, according to Thomson Financial's Insider Research, which tracks insider transactions. Meanwhile 3,680 executives from 1,592 companies engaged in share sales. Both measures set five-year highs.
In recent weeks investors have been barraged by positive economic data and better than expected third-quarter earning reports, sustaining a rally in U.S. stocks...
Yet heavy insider sales could give investors pause, since top executives and directors are perceived as knowing their company's prospects best and therefore the figures can serve as a gauge of executive confidence...
Stock-buying activity last month also pointed to a waning of confidence. Insider purchases rose 67 percent to $105 million from October, well below the historical five-year monthly average of $172 million.
Moreover $42.98 were sold for $1 of stock purchased last month, the seventh straight month the sell-buy ratio remained in "very bearish" territory -- well above the $20 mark. Still that represents an improvement from October, when the ratio hit $59, its highest level in at least a decade.
The whole story here,
from Reuters by way of Yahoo.
Just guessing but it's possible the DJIA could crack 10,000 this week yet but I expect it'll drop back down to the 9,000 range by Mid-March and winter sets in and Natural Gas and heating oil prices rise again.
Things seem pretty good in most of the economic fronts but employement has to increase significantly yet and inflation has to be kept in check (I suspect inflation will be a minor problem come spring..).
PDid, I've also been watching the insider trading logs in our newspaper, and many officers of local comanies are cashing in on their stock options. It's disturbing when we see an individual gaining ten million in one trade of their company stock. It seems to me that that creates a handicap for p/e ratios to improve. I also wonder how much of the companies profit those sales take away from future potential earnings. The past several months have been a gold mine for insider traders.
Insider buying hasn't been much of a feature fore about 4 years now ... sells have outstripped buys every quarter since Q3 '99. The structure of many insider option plans is more of a "Bonus Program"; a given number of shares are transfered to the insider through what is known as "Non-Open Market", wherein the stock is simply granted to the holder, with no cash acquisition cost. Similarly, an insider may have the option to purchase a given number of shares at a preset price which is considerably below current market value. Most of these option excersizes are time-limited; they have an expiration date, a "Use it or lose it" point. More significant, I think, than insider transactions, is the behavior of the major institutional investors, of which something like 20 of them hold roughly 80% of all Big Board stocks outstanding. The Big Boys have been in net acquisition mode for about a year now, to the tune of around $5.8 Trillion. C.i. brings up a point, here, though. A good deal of recent insider sales activity has been triggered by the approaching Jan '04 end of the "Grandfather Window" which exempted pre-existing options agreements from the new accounting, BTW. New accounting regulations require that stock options excercized now be charged directly against cash earnings, which had not previously been the case. While in the past, options were not a directly accountable expense, they now are, just like taxes, payroll, cost-of-goods-sold, and other operating costs.
I'll go out on another skinny limb (having fallen and broken a leg already) and say that I think this market has all possible optimism already factored in; it ends the year closer to 9,500 than 10,000.
Everybody should be taking my
The Dow Jones industrials closed up 25.3% in 2003, the Nasdaq composite surged 50%, and the Standard & Poor's 500 gained 26.4%.
The Dow closed up 28.88, or 0.3%, at 10,453.92, its highest level since March 21, 2002.
The Nasdaq declined 6.51, or 0.3%, to 2003.37. The S&P 500 rose 2.28, or 0.2%, to 1111.92.
In the end, the three main gauges had their best annual performance in years, with the Dow notching its strongest gain since 1996 and the S&P seeing its best since 1998. The Nasdaq had its third best performance ever, behind a 57% rise in 1991 and an 86% gain in 1999.
"So what's your suggestion for the coming year, Mr. Did Not?"
"Why, it's 'sell, before the terrorists strike again, ya moeron' "
PDid, It's really amazing isn't it? We have economic growth without job growth, more jobs are being offshored to China and India, and our stock market hits new highs. I really think there's a disconnect between people's money and their brain. The only positive we have going is the loss of the US dollar against most other currencies - which also dumbfounds me, because we're still the 'strongest' economy in the world. That means our trade deficit just lost 30 percent of their value to our trading partners, and it'll cost more for us to visit Europe, Japan, and Australia. Our goods and services becomes more competitive in the world markets, and hurts those same countries that's gained on the US dollar. Pennies from heaven, perhaps. It's a screwy world out there, and I'm not sure how to read it. There's an interesting article in today's San Jose Mercury News Business Section. The dummy group that picked stocks out of a hat got the best performance for 2003. The so-called "experts" did the worst. Nothing is changed: Everybody is confused. My prediction for 12/31/2004? About the same as my prediction for 2003; DOW at 9,000. Don't see any job increases that'll exceed the job losses for the whole year. Maybe the market will show another 25 percent increase. ha, ha, ha......
.....I'm laughing all the way to the bank.
HAPPY NEW YEAR! c.i.