Dow Crosses 12,750-Looks To Close In On Multi-Year Highs:
Technical analysis and economic fundamentals are strong.
The Dow Jones Industrial Average along with the S&P 500 and the NASDAQ are closing in on new highs. The Dow Jones crossed a key level we identified as 12,750 today in early trading although most of those gains slipped in later trading today by 3:00 EST (January 23, 2012). Corporate earnings may help the market rally further and a slew of economic news will drop this week as well as an FOMC meeting. Stocks are already poised to cross the one-year high mark and the Russell 2000 outperformed the overall market last week which is a good sign investors might look to buy more stocks in the short run.
Tech giant Apple and consumer favorite McDonald’s will be releasing earnings this week along with several other Dow 30 components. If corporate earnings continue to be strong, investors could gobble up stocks in anticipation of better returns toward the end of the year. We are looking for the market to make new highs in the next medium run and many analysts/economists think stocks are relatively cheap with average price to earnings ratios around 12 which is well below the historical average for the last few decades. U.S. equities are selling at great prices, earnings are up and the economy looks to be headed in the right direction. Conditions are ripe for the rally that began in August 2011 to continue. It may be time to look for Dow 13,000.
