Dow 14,000: This Rally Isn’t Over Yet…

| March 9, 2012 | 0 Comments

Maybe you don’t realize it, but today is rather historic…

Why?

On this day three years ago, the Dow closed at 6,547.

Uhhh… what’s the big deal about that you ask?

Well, that was a critical turning point for the US stock market.  As you know, the panic set off by the near collapse of the US financial system sent stocks spiraling out of control in 2008-2009.  Stock market bears wiped 50% off the value off the Dow in less than a year.

But the bears finally went into hibernation on March 9th, 2009…

And once the bears were asleep, the bulls came out to play.  On March 10th, 2009, bulls kicked off what would become one of the biggest market rallies in history.

In fact, the Dow is up nearly 100% since those highly uncertain days in early 2009..

But as you know, it hasn’t exactly been smooth sailing…

There’s been plenty of rough water for investors to endure.  The Dow looked like it would revisit those March 2009 lows more than once in recent years.  Greece’s debt drama, along with the ‘flash crash’ of 2010, gave investors plenty of reasons to jump ship.

But regardless of the crisis rearing its ugly head, markets have been able to shake off the worries and move higher.  And now here we are, just a hair short of Dow 13,000- the same level we were at in May 2008… right before all hell broke loose.

The question now is…

Can this monstrous 3-year rally continue?

Now that the Dow, S&P 500, and Nasdaq have recovered most of their losses from the ’08 crash, can stocks keep rising?

Bearish analysts believe the bulls are ready to be put out to pasture.  They have a multitude of reasons why stocks have no business trading at current levels.  And they believe markets have nowhere to go but down.

But I disagree…

This incredible bull run has more ground to cover.

As you know, this is an election year here in the US.  Couple that with an improving US economy, and you have a winning combination for stocks.  And now that Europe is finally getting back on track, the bullish situation improves even more.

Now, that’s not to say we won’t see a hefty pullback here and there.  After all, even in the most perfect of economic conditions, markets don’t go straight up.  It’s completely normal to see bouts of selling within the confines of a bull market.

But after the inevitable pullbacks run their course, I wouldn’t be surprised to see the Dow hit 14,000.  You read that right, a retest of the 2007 highs.

How can you capitalize on yet another burst higher in the Dow?

The simplest and most efficient way to hitch your portfolio to additional upside in the Dow is with the SPDR DJ Industrial Average ETF (DIA). This ETF tracks the day-to-day movements of the Dow and is tradable just like a stock.

Bottom line…

The past three years have been very rewarding for stock market bulls.  But just because the Dow has recovered nearly all the losses from the 2008-2009 market crash, doesn’t mean stocks can’t keep moving higher.

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Category: Stocks

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.

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