The Dow remains within its trading range of approx 10,800 to 10,000. However, as stated, my original expectations for the year remain for the Dow to target 12,000 to 12,500 by year end as illustrated by the below graph. The longer term trend remains as I voiced right at the very bottom in March 2009 is for the stock market to have entered into a multi-year bull market, so far the market has done NOTHING to negate this scenario.
CHART/IMAGE HERE>>>>
http://www.marketoracle.co.uk/images/2010/Feb/dow-weekly.gif
DOW Stock Market Forecast 2010
Whilst the market remains range bound, my expectations are for an eventual breakout higher which will probably see prices ramp up quite quickly while the majority of analysts across the mainstream press and BlogosFear have concluded in a resumption of the so called bear market with a plethora of gobbledygook put forward that NEVER MATCHES REALITY, such as the nonsense that the stock market must fall due to expectations for REVERSION TO BELOW THE MEAN for PRICE / EARNINGS ! That is another MYTH based on analysts just regurgitating what others have written many times over.
THERE WILL BE NO REVERSION TO BELOW THE MEAN, THE S&P PRICE / EARNINGS RATIO WILL NOT FALL TO SINGLE DIGITS !
We are in the consolidation phase before the next ramping up of stock prices takes places. The consolidation zone IS the time for LOW P/E's, which means today's market P/E is LOW NOT HIGH!