Stock Market Bears Wrong Again, Apple to Push Dow to New All time High
Stock-Markets / Stock Markets 2014 Apr 24, 2014 - 04:34 AM GMTBy: Nadeem_Walayat
Despite continuing perma bearish diatribe of why the stocks bull markets demise is always imminent, instead the general stock market indices such as the S&P have been setting new all time highs with the Dow set to imminently make its next all time closing high that follows on strong corporate news from the tech giants such as Apple and Facebook.
Facebook - Revenues surge by 72% for Q1 2014 to $2.5bn, with quarterly profits climbing to $642mln from last years $219mln.
Apple - Blasted through clueless mainstream analyst expectations that were warning of Apple's 'long winning streak being in jeopardy' (WSJ), by posting record revenues of $45.6 billion, and profits of $10.2 billion. Apple also announced an additional stock buy back programme of £30 billion and an 8% increase in its dividend.
However, where the prospects for the Dow are concerned the announcement of a 7 for 1 stock split now sows the seeds for this highly profitable tech giant to enter the DJIA 30 index because the Dow is a wholly price weighted index so the Apple stock trading at $524 would have had a huge impact on the Dow index when compared to other components such as Cisco trading at $23.50 or Exxon at $100. Whereas a 7 for 1 stock split would now re-price an Apple share price from $525 to $75 which would make it 'fit' the index in terms of price weighting.
Therefore Apple looks set to continue to feed the Dow's exponential growth spiral that will continue to leave the clueless perma-bear crowd foaming at the mouth as the DJIA continues to set a series of new all time highs as it continues to perpetually ditch dieing corporations and industries for the new fast growing corporate giants.
My last analysis of the Dow which I wrote at the heights of the then imminent bear market about to begin mantra of early February 2014 concluded in the following trend expectation:
3rd Feb 2014 - Stocks Bull Market Over? Are the Bears About to Break...even?
The current stock market correction looks set to attempt to revisit 15,000. How close it gets to 15,000 I can't tell, perhaps half way, just that the correction is not done to the downside. Following which the price chart implies that the Dow will enter an upwardly sloping trading range that would target a NEW all time high. However given the nature of trading ranges it is difficult to say how many swings it would take for such an outcome to occur, i.e. the last such trading range comprised 7 swings before breaking higher. This one could be quite brief and just comprise 2 swings as indicated by the chart, which could imply a New Dow high by early April, though that does not mean that the Dow would be able to hold the high as it could remain in the upward sloping range for some time which implies Sell in May and Go away as probable.
So to answer the question - Is the stocks bull market over ?
NO ! No sign whatsoever that this (what people decades from now will look back on as being the greatest bull market in history) bull market is anywhere near being over!
The subsequent price action closely matched my trend expectations as the Dow bottomed at around 15,250, and then began its volatile climb to set a new all time intra-day high on 4th of April 2014 at 16,631, just failing to break its closing high of 16,577 of 31st December 2013 by 5 points (16,573).
My next in-depth stock market analysis will follow early May 2014, following the completion of my latest ebook in the Inflation Mega-trend series by the end of this month. Ensure you are subscribed to my always free newsletter to get BOTH in your email in box.
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Nadeem Walayat
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Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of four ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series.that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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