Dow passes 10,000

[SirJosephPorter]

Well, Dow has passed 10,000 once again, after more than a year. In March, Dow had hit a 12 year low of 6547.

CANOE Money - News: DJ industrials pass 10,000

I remember the mood was distinctly gloomy at that time. Experts were predicting doom and gloom as far as eye can see. This time it was different, this time the markets were not coming back for years. But then experts say that during each and every downturn. Many investors were in a panic.

When the sentiment is so negative, so gloomy that is the best time to invest.

The comeback by the stock market’s best-known indicator is the most visible sign yet that investors believe the economy is indeed recovering from the financial crisis and recession.

Investors are increasingly shaking off lingering doubts about the economy. However, analysts still warn that problems like rising unemployment and a weak housing market pose a threat to a solid recovery.

The Dow is now up 53 percent from its March low.

Of course, TSE is no slouch, it finished above 11,500. I remember during dot com meltdown, Dow was around 10,000 and TSE around 7000. TSE has made spectacular recovery in the past few years.

So where do the markets go from here? Not a clue, it is always hazardous to predict what the market will do over the next few months. However, it wouldn’t surprise me if we are ripe for a correction of say 10 or 15 % (which would translate into a drop of 1000 to 1500 for both Dow and TSE).

Those who panicked when markets were at the bottom lost out big time. However, those who are aware of the trends of the market, who know that what goes down inevitably has to come up, those who invested when markets were at the bottom are doing very well today.

 

[kryptic]

so, with the stock markets going wild, and reality of foreclosures and job losses... do you think we are in for another crash SirJosephPorter?

 

[Spade]

To divine that, SJP has to look at the entrails of a bull.

 

[kryptic]

true... i just like to hear what others think...

 

[TenPenny]

To divine that, SJP has to look at the entrails of a bull.

Then all he needs to do is read a summary of his own posts.

 

[SirJosephPorter]

so, with the stock markets going wild, and reality of foreclosures and job losses... do you think we are in for another crash SirJosephPorter?

I don’t think so, cryptic. Assuming nothing unforeseen happens, I expect a slow but steady recovery in the job market starting perhaps 6 to 9 months from now.

Unemployment is always the trailing indicator. In almost every recession, unemployment does not start to decrease until long after all the indicators tell us that the worst is over.

Also things are by no means back to normal. Dow topped at 14,000 and TSE 15,000 not long ago. So I wouldn’t’ exactly say that the markets are going wild. Indeed, it may be years before markets reach new top, new heights.

By that measure, it may be years before we go back to the full employment before the meltdown. The meltdown was very severe, the worst since the depression; you don’t come out of that in a year or two.

So yes, I expect a steady improvement, but that doesn’t mean a return to the heady days of low unemployment and low inflation any time soon.

 

[SirJosephPorter]

To divine that, SJP has to look at the entrails of a bull.

That is as good a way as any of predicting the stock market, Spade. No better nor worse than any others.

 

[VanIsle]

I realize this has nothing to do with the OP but it may be a good indicator of things to come:
THE CANADIAN PRESS
OTTAWA - The Canadian Real Estate Association says sales of existing homes during the third quarter were among the strongest on record.
National home resales through the Multiple Listing Service owned by Canada's realtors totalled 135,182 in the third quarter of 2009, up 18 per cent from a year earlier and the most of any third quarter on record.
It was also the biggest year-over-year gain since early 2002 - another sign that the Canadian housing market is quickly returning to health.
The seasonally adjusted number was 127,941 homes resold, up 12 per cent from the second quarter and 48 per cent higher than the fourth quarter of 2008.
Association president Dale Ripplinger attributed the strong quarter to low interest rates and improved consumer confidence, which bought more buyers into the market.
In September, 42,958 homes were sold through the MLS. The average price last month climbed 13.6 per cent from September 2008 to $331,602.
"Headline average price increases over the rest of the year are expected to prompt sellers to return to the market after having retreated to the sidelines late last year and earlier this year," said CREA chief economist Gregory Klump.
"An increase in new listings will help keep a lid on price increases. Price increases over the rest of 2009 and early next year are likely to reflect declining average prices late last year and earlier this year."
Klump added that national sales activity seems to be "starting to plateau."
The supply of homes coming onto the MLS market edged up by a seasonally adjusted one per cent quarter-over-quarter, the first increase after four consecutive quarterly declines. However, CREA said new listings are likely to remain down compared to a year earlier for "some time."
Inventories of homes for resale was down 16 per cent at the end of September compared to a year earlier due to an increase in sales activity and fewer new listings, CREA said.
The numbers compiled by CREA from transactions using the Multiple Listing Service don't include sales handled by non-member agents.