Sunday, October 30, 2005

Stock Market Bottom? Dow 40,000?

A lot of people are calling a bottom in the Dow Industrial Average. I cannot stand when people say a stock bottoms or the general market bottoms. A bottom is zero or being delisted from an exchange! A bottom is not a specific price and it is not some technical level on a chart. I admit that there are price ranges (the past 5 years has been one ugly trading range), some people believe in "support levels ." I find support levels questionable because bulls only have so much money to pour into a loser (Ex: Pfizer or Tyco).

A lot of people believe that the Dow will hit 40,000 within the next 3-5 years. It would be nice to see some action in the stock market. I love looking at short interest on for overly bearish sentiment.

Why the Dow might run in the "short" term!
Diamonds Trust (Dow Industrial Average Exchange Traded Fund) (AMEX: DIA)

If you bought in the first 2 weeks of May you could have made 4-6% in just a couple of months. I think you can buy the Diamonds (DIA) right here and sell it in a couple of months for a 3-6% gain. I am considering the same trade for my account. See below for visual evidence.


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