Online:
Visits:
Stories:
Profile image
By ETF Daily News (Reporter)
Contributor profile | More stories
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

This Dow Jones Industrial Average (DJIA) Chart Says Stocks Have Already Peaked

Thursday, January 12, 2017 6:09
% of readers think this story is Fact. Add your two cents.

(Before It's News)

From Dave Kranzler: The stock market shot up like a Roman candle for idiotic reasons after the election. The candle may have reached its apex when the Dow hit 19,999.67 last week.

As I stated in my Short Seller’s Journal, I was “stunned that bank traders were unable to push the index up to the holy grail number of 20,000. Of course, in and of itself, the “Dow 20k” watch was moronic. Thirty stocks do not an economic system make. Sorry Fox, CNBC, Bloomberg, CNN etc.

I also stated in my Short Seller’s Journal, in the issue two weeks ago, and long before Zerohedge posted the comment from some guy named DeMark who predicted the Dow would never hit 20k, that 20k might not happen. In fact, I titled the issue, “Is Dow 20,000 Now Out Of Reach?”

The “Dow 20,000” financial media promotion has bordered on vulgar. Fox Business (which I keep on mute at all times) kept a “Dow 20,000 watch” banner at the bottom of its broadcast during the entire trading day for the last 2 weeks of 2016. It disappeared last week. In the context of the entire stock market and the U.S. economy, it’s meaningless for the Dow to hit 20k other than as a powerful propaganda tool.

The housing market is one of the most important segments of the economy. The DJ Home Construction Index is down 9.7% today from its 52-week high in July. Retail spending may be even more critical to generating GDP than housing. The XRT retail ETF is down 9% from hits 52-week on December 8th. This stock index has literally tanked during a period of time that is supposed to be the best seasonal period of the year for retail sales. There’s a serious message there. THAT’S where the rubber meets the road – not from meaningless platitudes and soundbytes from a President-elect.

Essentially Trump promised on election night to spend trillions and cut taxes deeply and to pay for those based on borrowing trillions. These are policy proposals that are destined to fail from the moment the words left Trump’s mouth. But the stock market went nuts to the upside, culminating in what I would argue – based on using “apples to apples” accounting comparisons – the most overvalued U.S. stock market in history. Perhaps in the modern era only the Weimar German and Zimbabwe stock markets were more overvalued. Stay tuned because I am very confident that the Fed is not done printing trillions.

dow-1-yr-macd

The stock chart above displays a market in which I would NOT want to be invested. Yes of course this stock market could break up or down. But since Christmas, every attempted assault on 20k has been rejected. And the Dow opens higher every morning only to sell off every afternoon into the close. Monday was a perfect example.

Yesterday, it looked the Dow was going to make another assault on 20k. But during Trump’s highly anticipated press conference, the Dow sold down hard from 19,970 to 19,840. That is a preview of what is likely coming in the months ahead, as the U.S. economic fundamentals continue deteriorate, notwithstanding the barrage of economic fake news coming from the Government and certain industry pimp associations.

The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) fell $0.33 (-0.17%) in premarket trading Thursday. Year-to-date, DIA has gained 0.92%, versus a 1.60% rise in the benchmark S&P 500 index during the same period.

DIA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #6 of 77 ETFs in the Large Cap Value ETFs category.


This article is brought to you courtesy of Sprott Money.

You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)



Source: http://etfdailynews.com/2017/01/12/this-dow-jones-industrial-average-djia-chart-says-stocks-have-already-peaked/

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.