Over on the Twitter I’ve been predicting the Dow will hit 10K by Labor Day, with the deadline approaching, I thought I’d show you where my prediction comes from.
The light blue is the DJIA from August 2008 – March 2009 (left to right).
The dark blue is March 2009 – Today (right to left).
The green is where I think we’re going over the next 4 weeks.
As you can see – the Dow has been steadily re-tracing its steps all summer. We are now as far away from the March low as when the Dow fell off a cliff in Oct 2008.
We’re not going to see a huge jump (reversing the fall), it’s going to be hard, steady work – notice how much less volatile the market is from last year.
The Conference Board’s Leading Economic Indicators also hit bottom in March, then turned 90 degrees and have been steadily climbing [pdf]. 1% up in April, 1% up in May, .7% up in June. Next week, I expect the Conference Board to announce another .7% rise for July.
Plus, unlike last October – there’s much less uncertainty lurking in the zeitgeist.
No, I don’t think we’ll be approaching the overheated 14k for at least another year, but I think it’s undervalued at anything below 12k.
Good work everyone.