Dow Jones for 14,100 or for 12,000 ?
The Current Trend
Dow Jones Industrial is found today at 13.150. The long term trend is certainly bullish, as the US economy and corporate news are both looking well. Especially as long as unemployment is falling and technology is pushing the economy to grow more. Looking at the whole picture –it is very possible that Dow Industrial during 2012 will test its historical record of 14,164.53 (October, 9th, 2007). It shouldn’t be forgotten that Dow Industrial usually performs well during Election Years. Based on historical statistics, Dow performs well on the Election years and bad on the years after.
What could ruin this nice picture?
But what could really ruin this nice bullish picture? The real danger for the US economy and Dow Jones respectively is coming from the other side of the Atlantic. The European economy is very weak at the time, with zero growth and high unemployment. Moreover, the countries of the South (Spain, Greece, Italy, and Portugal) and also Ireland suffer from heavy deficits and are still considered very dangerous for capital lenders. These systemic fears are transformed into high-interest rates of government lending -which are also transformed into larger deficits. If we put all the pieces together we may conclude that things may get worse, especially as concerns the European Banks. This whole situation creates a major problem for the global economy and it will certainly jeopardize the future course of the American markets in 2012. If everything goes bad in 2012, Dow will probably test 12.000.
Dow Jones Historical Line Chart (1928-2012)
The above chart corresponds to daily closing prices of the Dow Industrial since 1928 when it was introduced.
Fibo Chart (1928-2012)
Trading Center Fibo chart is based on an innovative day-2-day market indicator that we have developed. Fibo indicator focuses on the historical percentage price changes in financial security. Fibo Chart in contrast with the Dow Line chart presented before may give a clear picture of what has happened since 1928.
Trading Center (2012)
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