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Prechter Forecasts Dow 1,000

Robert Prechter is best known for his use of the Elliott Wave theory. He rose to prominence in the 80s, especially after he advised clients to exit ahead of the 1987 crash. Today, Prechter foresees the U.S. economy sinking into a deflationary depression with stocks plunging. The Dow Jones Industrial Average may sink to between 1,000 and 3,000.

Prechter uses the Elliott Wave principle to plot market movement in waves. In a traditional bull market Prechter projects a five wave primary bull pattern. In a primary bear market he uses three waves down (ABC). According to his theory, the first leg down was from Dow 14,000 to 6,400 (A). The next wave up was from Dow 6,400 to 11,000 (B). He feels that we are now in wave (C) down. This is the most powerful and vicious wave.

Continue reading Prechter Forecasts Dow 1,000

Early Financial Fireworks Hit the Markets; Will the U.S. Emerge the Leader in the Second Half of Year?

With all the mixed signals driving uncertainty and worry lately, the consensus has been a foggy windshield with no clear direction. We can't even tell if one of the largest bear market rallies in history is fizzling or pausing.

On Wall Street, uncertainty is certainly a buzz killer for the irrationally exuberant. If you need a towel to wipe away the fog, take a look at Your Cheat Sheet to the Psychology of Market Cycles.

While contemplating where we're headed, let's take a look at some data points that indicate the US has the potential to lead the world out of this recession ...


Continue reading Early Financial Fireworks Hit the Markets; Will the U.S. Emerge the Leader in the Second Half of Year?

Dow Jones Jumps 400 Points, Now What?

So, Europe has stepped to the plate and agreed to a almost $1 trillion rescue plan to help avert a debt crisis, with the U.S. Federal Reserve pledging to do its part for overseas loans. The move has been cheered on the Street, as the major indices are significantly higher, the Dow Jones leading the way with a more than 400-point gain. This gain makes up a good portion of last week's plunge, which was driven by fears that Greece's debt problems would eventually spread to all of Europe. The fear was that such a scenario would put the future of the euro and the economies of the 16 countries using the currency in economic peril.

Continue reading Dow Jones Jumps 400 Points, Now What?

Dow Jones Falls Below 11,000

As soon as the opening bell sounded this morning, the Dow Jones Industrial Average (DJIA) plummeted more than 150 points - effectively ruining yesterday's 143-point gain. In fact, as I write this blog, the Dow fell past a 200-point loss.

Why the drop? Blame it on Greece, as the euro fell against the dollar thanks to worries that the Greek government will not be able to meet the rather stringent guidelines of its aid package. Moreover, the German government is set to provide most of the EU's support, and there is no guarantee that the electorate will back Chancellor Angela Merkel. Add this to the fact that German retail sales dropped more than 2% in March, and we have a full-blown European panic hitting Wall Street.

Continue reading Dow Jones Falls Below 11,000

3M Company Enjoys a Solid Day

3M Company (MMM) benefited from a comment from brokerage Morgan Stanley. The brokerage house believes that 3M will rally after an optimistic forecast from Danaher (DHR), which operates in many of the same markets as 3M. The broker believes that the stock will enjoy a nice 30-day run thanks to DHR's forecast.

The thing is, if the stock continues the performance it started in early 2009 -- we shouldn't need a brokerage to tell us that the stock will do well during the next 30 days. Shares of 3M have advanced along the double-barreled support of its 10- and 20-month trendlines. The last time the equity finished a week below both of these trendlines was more than a year ago.

Continue reading 3M Company Enjoys a Solid Day

Boeing Upgraded to Outperform

Macquarie Securities upgraded Dow component Boeing (BA) to outperform from neutral Wednesday morning. The brokerage based its decision based on the fact that the aerospace company decided to increase production rates for some aircraft as airline traffic improves.

Macquarie cited BA's decision to up the rate on the 777 while keeping the pace on the 737 the reason for the upgrade. The brokerage house believes that these decisions will lead to a "9% increase in aircraft deliveries next year." Macquarie added that it appears that 787 flight testing "remains on track" and that it seems as if the company will land a tanker contract with the Air Force.

Continue reading Boeing Upgraded to Outperform

Dow Sinks Below 10,000

The Dow Jones Industrial Average sank below 10,000 Monday, closing at 9,908.39. So what? In market analysis, round numbers like 10,000 often trigger a change in market sentiment.

For example, when the Dow first pushed through 10,000 on the upside in 1999, investors and traders took this as a sign of strength. Conversely, when it crashed through 10,000 on its way down to 6,400, panic gripped Wall Street. Then, in 2009, we had a bounce back through 10,000 on the upside in November. Again, investors and traders saw this as a sign of strength.

Continue reading Dow Sinks Below 10,000

Good Year, Bad Decade for Europe

Europe is hot, if you don't look too far over your shoulder. The Dow Jones Stoxx 600 Index played well through the stock market recovery of 2009, ticking up 28% (60% from its March 2009 low). This was the index's best annual performance in a decade.

Basic resources and banks gained 100% and 46%, respectively, this year, after having turned in dismal performances the year before. China helped, as well, with its elevated economic growth forecast good for another 0.5% gain during the shortened week of Christmas.

Continue reading Good Year, Bad Decade for Europe

Serious Money: Is gold an investment?

The amount of nonsense I come across misleading readers, or simply providing bad advice, makes me cringe. Sometimes our own site presents such information like discussing penny stocks and technical analysis.

In general, I distinguish bad advice, misleading or misguided information from that regarding a stock idea that simply did not pan out, of which I have been guilty too -- all of us have hits and misses. However, a post I read on Seeking Alpha promoting gold, with suggestions of doom by tailoring the data to fit the theory. The author supported his point by back-testing only ten years to a known low water mark.

Continue reading Serious Money: Is gold an investment?

New Facebook share structure hints at IPO

Facebook is implementing a new stock structure to make sure the founders retain control, immediately causing rumors about an impending initial public offering. Why would Facebook need Class A and Class B shares otherwise? Under the new structure, which is similar to Google's (GOOG), Mark Zuckerberg and other early entrants wouldn't have to worry about yielding the floor to outsiders when if the company goes public.

The stock structure was adopted to ensure that existing shareholders keep control on voting issues, according to Facebook statement. No details were given as to who the winners are in this arrangement, but a Wall Street Journal report says that, according to its sources, all current shareholders would be converted to Class B shares, which carry 10 times the voting rights of Class A shares.

Continue reading New Facebook share structure hints at IPO

Hyatt and Ancestry.com IPOs: Beginners' luck?

The IPO market has been pretty slow for the past two years due to the effects of a subprime mortgage crisis that turned into a credit crisis that turned into a worldwide financial crisis and recession. Nonetheless, two companies made their debuts Thursday -- one on the NYSE (NYSE: NYX), the other on the NASDAQ -- and they nailed it. Hyatt Hotels (NYSE: H) gave its investors a 12% gain on its first Big Board trading day, and Ancestry.com (NASDAQ: ACOM) switched those digits, jumping 21% in its first day of trading.

Hyatt Hotels overcame two major concerns. The worldwide travel market slump has been tough on hotel companies, and Hyatt has been subject to the same forces as everyone else. Also, investors may have been worried about infighting among the founder's heirs (the Pritzker family), but the double-digit price increase suggests that investors don't foresee Bancroft-style squabbles screwing investors -- or, if you don't like Dow Jones, now a part of News Corp (NASDAQ: NWS), Playboy (NYSE: PLA) makes the same point.

Continue reading Hyatt and Ancestry.com IPOs: Beginners' luck?

Market ends the day lower, but up for the month

stocks post gains in septemberThe market was able to stage a late day rally which erased some of its earlier losses, but still ended the day in the red, with all 3 major indexes closing down on the day.

September is typically not a good month for the market, but even with today's losses this September was positive, as more and more investors have started to believe the economy is coming out of its recession.

Continue reading Market ends the day lower, but up for the month

iPhone app makes stock market rally disappointing

A new stock ticker tool for the Apple (NASDAQ: AAPL) iPhone may not have you hoping for a plunge, but at least it takes the sting out a little bit. This new application pairs strippers with tickers, and as the numbers tick down, items of clothing find their way to the floor. There's a different girl for each of the major indices, providing a bit of spice to international financial markets. So, whether you follow the DAX or the Dow, you won't be the only person losing his shirt when the market tanks.

Doubtless, some have no interest in watching svelte stripping women illustrate their loss of fortune. For this crowd, male strippers are available. Whether you lean toward boys or girls, whatever your sex and orientation, sometimes a helpful hottie is exactly what you need to soothe your spirit.

Continue reading iPhone app makes stock market rally disappointing

The DJIA just wouldn't be the same if it wasn't the DJIA

This is the era of "naming rights" and specialized promotions, such as "XYZ Company is the sponsor of tonight's weather forecast," but a name change for the Dow Jones Industrial Average? Please.

The DJIA's name could change if parent News Corp. (NYSE: NWS) follows through and sells its stock-index business, Bloomberg News reported. Goldman Sachs (NYSE: GS) has been hired to evaluate potential deals.

Continue reading The DJIA just wouldn't be the same if it wasn't the DJIA

U.S. Federal Reserve says that Americans are $2 trillion dollars richer!

The Federal Reserve said that Americans are $2 trillion dollars richer in the second quarter. Where did all this money come from?

You guessed it, the stock market. The value of U.S. stock holdings rose 21.6%

Other factors came into play. Home prices were up 1.8% and that added to your wealth. Americans are also paying off their debt. Household debt shrank by 1.7% in the second quarter.

Continue reading U.S. Federal Reserve says that Americans are $2 trillion dollars richer!

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Symbol Lookup
IndexesChangePrice
DJIA-89.2312,801.23
NASDAQ-23.352,903.88
S&P 500-9.311,342.64

Last updated: February 11, 2012: 10:16 AM

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