Weekend Reading: Dow 24,000 By Christmas Quotes of greatness... The hardest thing in the world to understand is income tax. -Albert Einstein ---------------------------------------------------------------------------------Authored by Lance Roberts via RealInvestmentAdvice.com, This past week, the Dow crested 23000 sending the networks into a tizzy. It took about 5-minutes of crossing that magical round number, before questions raised of how long before the markets cross 24,000, and 25,000. The chart below shows the 1000-point milestones of the Dow going back to 2009. After a long break between 18,000 and 19,000 in 2015 through the election in 2016, the Dow has surged higher ticking off 4-more milestones in less than a year.
As I have shown previously, these late stage melt-ups are not uncommon. In fact, as shown below, it is something witnessed prior to every market peak previously.
As I stated just recently: Thispast weekend, I discussed what appears to be the markets ongoing melt-up toward its inevitable conclusion. Of course, that move is supported by the last of the holdouts that finally capitulate and take the plunge back into a market that can seemingly never go down.But therein lies the danger. However, it should be noted that despite the hope of fiscal support for the markets,longertermconditions are currently present that have led to rather sharp market reversions in the past.Regardless, the market is currently ignoring such realitiesas the belief this time is different has become overwhelming pervasive. With volatility crushed, and record short positions on the VIX, there will likely be an event at some point that leads to a massive reversal in the assessment of risk and an unwinding of the market.
However, such is not the case currently as even small dips are met with eager buyers which continues to reinforce the very dangerous lack of fear. With more ETFs currently available to investors than there are stocks to fill them, it is quite likely the demand ramp for ETFs will continue to push the Dow higher into the end of the year. Dow 24,000 by Christmas? Dont be surprised if it happens. Just remember, all market melt-ups end just when things look their brightest. Heres your reading list to for the weekend. Trump, Economy & FedMarketsResearch/ InterestingReads A bear market returns capital to those who it rightly belongs to. Ian McAvity Could You Benefit From an Advisor? Understanding modern-day finances will not only help you personally, but will be a true educational benefit when it comes to business success. Learn more today... Peter Benet
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