Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21
Ultimate Gaming and Home Working PC System Build 2021 - 5950X, RTX 3080, Asus MB - Scan Computers UK - 7th Jan 21
Inflation the bug-bear looking forward through 2021 - 7th Jan 21
ESG ETF Investing Flows Drive Clean Energy to Fresh Highs - 7th Jan 21
5 Financial Market Surprises in 2021 - 7th Jan 21
Time to ‘Reset’ Your Investment Portfolio in 2021? - 7th Jan 21
Bitcoin Price Collapses almost 20% at the start 2021 - 7th Jan 21
Fed Taper Nervous Breakdown - 6th Jan 21
What Will the U.S. Dollar Ring in for 2021? - 6th Jan 21
Stock market frenzy- Ride the bandwagon but be sure to take along some gold coins - 6th Jan 21
Overclockers UK Custom Build Gaming System Review Heat Test and Final Conclusion - 6th Jan 21
Precious Metals Resuming Bull Market, Gold, Silver, GDX Trend Forecasts 2021 - 5th Jan 21
Trump’s Iran-COVID-Gate Anniversary  - 5th Jan 21
2021 May Be A Good Year For The Cannabis / Marijuana Sector - 5th Jan 21
Stock Market Approaching an Important Target - 5th Jan 21
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB - 5th Jan 21
NEW UK Coronavirus PANIC FULL Lockdown Imminent, All Schools to Close! GCSE Exams Cancelled! - 4th Jan 21
The Year the World Fell Down the Rabbit Hole - 4th Jan 21
A Year Like No Other for Precious Metals… and Everything Else - 4th Jan 21
The Stocks Bull Market is Only Half Completed - 4th Jan 21
An In- Depth Look At Gold Price Trend - 4th Jan 21
Building America Back After a Dark Covid Winter - 4th Jan 21
America's Dark Covid Winter Ahead - 4th Jan 21
Buy a Landrover Discovery Sport in 2021? 3 Year Driving Review - 3rd Jan 21
Stock Market Major Peak in Early April 2021 - 3rd Jan 21
Travel and Holidays 2021 - Flight Knight Cabin Bag Review - 3rd Jan 21
�� Happy New Year 2021 Fireworks and Drone Light Show from London and Sheffied - BBC�� - 2nd Jan 2
The Next IMMINENT Global Catastrophe After Coronavirus - 1st Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Will 2011 Be The Dow’s Best Year Ever?

Stock-Markets / Stock Markets 2011 Jan 15, 2011 - 06:42 AM GMT

By: Barry_M_Ferguson

Stock-Markets

Best Financial Markets Analysis ArticleCould it be? Will it be? I haven’t been this giddy since 1999. Of course, I’m all jacked up on POMO and TOMO and QEs. But think about it. The Dow is already up about 2% for 2011 and January is only half over. If the Dow could go up 4% every month, it would be up 48% on the year. Certainly our Ruler of all things bubbly and bubblicious, Mr. Bernanke, will over shoot a few months and push the Dow up 6% or 8% on some months! What? What’s that? You haven’t heard that the stock market was captured in August of ’07 and it is now the sole contrivance of the wealthy to amass more wealth? What’s that? How are they doing it, you say? Well, first the super wealthy had to take the helm of the world’s largest economies.


They did that by putting the dumbest people they could find in political office and then creating a seemingly horrendous economic event so the dumb people would hand over the keys. The super wealthy have this thing called a printing press and it can conjure up money at the snap of a finger. They say it can cure the cuts, heal the hurts, bandage the bankrupt, fix the foreclosed, and straighten out the stupid. Seems no one knows how the contraption works except that Bernanke fellow and when he tickles that thing - magic happens! So now the Federal Reserve is running the whole show.

The stock indexes are theirs and they want to make sure the super wealthy get super-er wealthy-er. Trouble is, the world’s economic machine is running like an 1974 Chevy Vega with a hundred-thousand miles on it. The economic machine is not generating wealth. Neither is its ‘American Motors Pacer’ cousin, real estate. So, all the wealthy have left is the stock indexes. And, since the super wealthy put, and keep, the bankers in power, the bankers have to make sure the super wealthy are taken care of really nicely. I believe I read a stat that the top 10%  in terms of wealth own 90% of all stock. If that is wrong, I would love to be corrected. What they all need is a really good year from the stock indices and maybe they would then own 95% of all stocks!

The best year ever for the Dow was 1915. The Dow was up 81%. Coincidentally, that was one year after the birth of the Federal Reserve. Even more coincidentally, that was one year into WWI. The second best year ever for the Dow was 1933 as the Dow was up 66%. Coincidentally, Americans were losing their homes in droves in those days. Even more coincidentally, small banks were imploding like super thermite coated buildings. In case you are wondering, the third best year ever was 1928 with the Dow up 48%. So, it is easy to see that we have a chance for a historically good year in stocks this year, 2011. Why should we be confident?

It’s the Federal Reserve, silly! They have the money machine. The citizens are either doped or dopey and the people’s Congress remains stupefied in a state of catatonic cognition. Thus, the Fed rules supreme! They can do whatever they want without challenge. And what they want is quantitative easing.

Now that we know what they want, we must extrapolate where they want to go. I have included the chart below for a roadmap reference. The chart is the Dow in candlestick and the USD (US dollar) in green since September 1, 2010 (the beginning of QE2 and its announcement). The chart is a weekly look at how the Fed’s program has progressed. And yes, it is a thing of beauty. Four months and two weeks of trading and there have only been four, count them - four, down weeks. And, only one of those weeks was even the least bit painful. Of course, the dollar has to lose in order for the stock indices to gain. Check out the chart and imagine another eleven months of this pattern! Yes, we may indeed experience the best year ever in the Dow this year! QE2 will wind down in June. I can’t wait for QE 3! The Fed will be buying municipal bonds, stocks, Treasuries, and everything else to make the Dow rise. Heck, Bernanke himself might start calling each of us to make us a premium offer on stocks we are holding!

Chart 1 - DIA in candlestick, USD in green - since September 1, 2010
Chart courtesy StockCharts.com

The only thing even restraining gains on the Dow has been concerns over corporate earnings. Ha! I like to include jokes so readers don’t get bored. No really, investors have been concerned about the continued trouble in real estate. Ha, ha - that’s another good one! No one cares about anything because the Dow is no longer based in reality. It is now simply an indicator on a ‘Ring the Bell’ carnival game. The Fed has a monetary mallet that they use to hit the pivot board. However hard they hit the board, the indicator reacts accordingly. Along that line, this past week was witness to a bit of nervousness over the fate of Portugal’s bond offering. You know the story. Portugal is just one more in the succession of European sovereign (or as I prefer - pseudo sovereign) nations that can no longer pay their bills. They are carrying on the American way - they are going to borrow their way to prosperity! Of course, no one wants to buy junk debt at single digit interest coupons so Japan and the ECB generously offered to absorb the rancid bonds. And of course, just like every other bankrupt nation, Portugal vehemently denied needing a bailout.

Really - they did!  Well, I guess they were right - they were already getting a bailout. But the debt was ‘well received’ and the investment world took the news like it takes all news. Bad news is ‘good news’ and good news is ‘better news’. So, Portugal’s debt is solved just like Greece’s and Ireland’s. It’s time to rally, rally rally! Ta-da! I think I am starting to like the ECB. I think I’m starting to like quantitative easing. I think I would like to see the best year ever in the Dow! I think I am even starting to like Ruler Bernanke! The way he shakes his POMO is a real turn-on!

Barry M. Ferguson, RFC
President, BMF Investments, Inc.
Primary Tel: 704.563.2960
Other Tel: 866.264.4980
Industry: Investment Advisory
barry@bmfinvest.com
www.bmfinvest.com
www.bmfinvest.blogspot.com

Barry M. Ferguson, RFC is President and founder of BMF Investments, Inc. - a fee-based Investment Advisor in Charlotte, NC. He manages several different portfolios that are designed to be market driven and actively managed. Barry shares his unique perspective through his irreverent and very popular newsletter, Barry’s Bulls, authored the book, Navigating the Mind Fields of Investing Money, lectures on investing, and contributes investment articles to various professional publications. He is a member of the International Association of Registered Financial Consultants, the International Speakers Network, and was presented with the prestigious Cato Award for Distinguished Journalism in the Field of Financial Services in 2009.

© 2011 Copyright © 2010 Copyright BMF Investments, Inc. - All Rights Reserved
Disclaimer: The views discussed in this article are solely the opinion of the writer and have been presented for educational purposes. They are not meant to serve as individual investment advice and should not be taken as such. This is not a solicitation to buy or sell anything. Readers should consult their registered financial representative to determine the suitability of any investment strategies undertaken or implemented.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules