All Posts (10732)
Sort by
On Friday, January 25th, 2013 the S&P 500 closed at 1502.96. This was the first time the S&P 500 has closed above 1500 since the Financial Collapse began in 2007. On Friday, February 1st, 2013 the Dow Jones Industrial Average closed at 14009.79, also the first time it has been above 14,000 since the financial and real estate bubble burst in late 2007.
Is it a coincidence that 80%+ of every major number close on the S&P 500, Dow Jones Industrial Average and NASDAQ occurs on a Friday? Or is it a darker conspiracy to lure the retail investor back in the market at its highs prior to a big correction? This is a major question that must be pondered. Why on earth do so many Friday's over the last decade seem to close above major levels?
Let's look at the reasoning behind the government, Federal Reserve and institutions pushing the market above major levels into a weekend.
1. Closing the market above a major level on a Friday guarantees major media attention that evening and all throughout the weekend. When the S&P closed above 1500 and the Dow Jones Industrial Average closed above 14,000, the lead story on the nightly news was the stock market and how great it was. In addition, the media continued to pump it all weekend long. The retail, average investor has more time to view the news on the weekends and the pumping will give them an emotional response about missing the move, thus they will flock into stocks in the coming days, going "all in".
2. The media attention above a major level like 14,000 on the Dow Jones Industrial Average will create a sense of wealth. As people hear how well the markets are doing, it makes them feel they are doing well themselves and the economy is improving. The result of this is more spending. This weekend is the Super Bowl. I promise you a few more big screen TV's are being bought this weekend.
3. When do most Americans do their shopping? The answer is the weekend. The closing of a major index above a key level creates the wealth effect and feeling just when most people do their shopping. They are more likely to buy that new TV, go out to eat with the family or other economic stimulating acts.
It is clear that closing a major index above a major level on a Friday stimulates the economy more than closing it on any other day during the week. The big question that you must ask yourself is whether or not it is a coincidence or an act generated by the Federal Reserve and institutions to fool the average retail investor into spending more money, and jumping back into the stock market just before a correction. Can 80%+ ratio of major level closes really be a coincidence?
I will let each and every one of you make your assessment. It is important to look at all angles and realize that before any major correction the retail investor has always been coaxed back into the market by the media pumping key level closes.
Related: SPDR S&P 500 ETF Trust (NYSEARCA:SPY), SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) and PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ).
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Presented by Nick Santiago February 01, 2013 10:28AM
Last week, the S&P 500 Index reached and breached the psychological 1500.00 level. Today, the Dow Jones Industrial Average (DJIA) is trading higher into the important 14,000.00 level. The DJIA is the level that the public will follow most closely. Remember, the average person that works a nine to five job will turn on the evening news and hear what the stock market is doing in terms of the DJIA. If you ask most people in the public what the Russell 2000 Index is they will most likely not have a clue what it is.
This coming Sunday is the National Football League's Superbowl Sunday. This day has almost become a national holiday in the United States. What better way to get people to spend money than to have the DJIA close at or above the 14,000 level by the end of the trading session. It is important to note, if this entire money printing stimulus by the central banks is going to work for a while it will need the U.S. consumer to spend money. Consumer spending accounts for roughly 70.0 percent of the gross domestic product in the United States.
Right now, the stock markets seem to be somewhat euphoric. Bad economic news is now good news and good news is now great news. The major stock indexes are all overbought at this time, however that does not mean that they cannot climb higher. Usually, when public gets back involved in stocks it is when a major correction will take place. After all, the large financial institutions need to have someone to sell to.
Some leading index funds that are rallying higher today include the ProShares Ultra S&P500 (ETF) (NYSEARCA:SSO), ProShares Ultra QQQ (ETF) (NYSEARCA:QLD), ProShares Ultra Russell2000 (ETF) (NYSEARCA:UWM), and the ProShares Ultra Dow30 (ETF) (NYSEARCA:DDM). Watch for Dow Jones Industrial Average to reach that psychological 14,000 level by the closing bell. The last time the DJIA traded this high was in late 2007.
Nick Santiago
www.InTheMoneyStocks.com
This coming Sunday is the National Football League's Superbowl Sunday. This day has almost become a national holiday in the United States. What better way to get people to spend money than to have the DJIA close at or above the 14,000 level by the end of the trading session. It is important to note, if this entire money printing stimulus by the central banks is going to work for a while it will need the U.S. consumer to spend money. Consumer spending accounts for roughly 70.0 percent of the gross domestic product in the United States.
Right now, the stock markets seem to be somewhat euphoric. Bad economic news is now good news and good news is now great news. The major stock indexes are all overbought at this time, however that does not mean that they cannot climb higher. Usually, when public gets back involved in stocks it is when a major correction will take place. After all, the large financial institutions need to have someone to sell to.
Some leading index funds that are rallying higher today include the ProShares Ultra S&P500 (ETF) (NYSEARCA:SSO), ProShares Ultra QQQ (ETF) (NYSEARCA:QLD), ProShares Ultra Russell2000 (ETF) (NYSEARCA:UWM), and the ProShares Ultra Dow30 (ETF) (NYSEARCA:DDM). Watch for Dow Jones Industrial Average to reach that psychological 14,000 level by the closing bell. The last time the DJIA traded this high was in late 2007.
Nick Santiago
www.InTheMoneyStocks.com
