Dow  Heading  to  30,000 by  Year  End

"What we learn from history is that people don't learn from history"

Mr. Warren Buffett

This is what I had written in my blog post exactly a year ago on July 8th:

"Market conditions have improved dramatically since Thursday June 28th.  Market is very efficient and all the news you hear on a daily basis about the North Korean rocket man, tariffs, interest rate hikes by the central banks of US/Euro Zone/Japan or the disruption of oil supplies and immigration reforms or the knee jerk reaction with every tweet that Mr. Trump discharges is all priced in with every stock.  I have often said that the market does not have any political bias or leanings towards any religion.  Markets don't really care for your opinions or your prayers either.  It is best to tune out all the noise in the market and just look at the data to guide your decisions.  Paying too much attention to every tick in the market and looking over your positions too closely on the computer is futile.  I can assure you, that will not move the stock and will only get you frustrated." 

Nothing has changed

Last year, $NASDAQ was  + 11%  during the first half of of the year.  This year, results are even better than last year as shown below:

• $DJI      ... + 16%
• $SPY    ... + 20%
• $QQQ   ... + 25%

Mr. Ryan Detrick of LPLA Financial had tweeted last week shedding some light on the historical performance of the market.  He tweeted:

"Past 3 times $SPY was  +15%  halfway through the year, final 6 months did really well".

He also stated:

"Past 10 years, July has been the strongest month for  $SPY"

You don't hear this on TV or print media.  All we hear is that this bull market has gone on too long and we have a yield curve inversion.  There is talk about the recession and the fact that earnings are going to be disappointing.  

Nonsense

I would just like to remind all my readers that in July of 2017 as well as July of 2018, we had a  "Follow thru"  day in early July and the market began to post higher highs in the weeks and months to follow.  That's what the recent history suggests.  We have been in a sideways market for the past 17 months with the  $SPY  and  $QQQ.  $DJI  has been in the sideways market for the last 10 months.  As of a a week ago, all the 3 major indexes have their 20 day sma(simple moving average) heading up and crossed over the 50 day sma.  That's a very bullish move.  They are all printing their all time highs now and there is very little overhead supply of seller now.  Longer the market moves sideways now, higher the likely hood of the the market forming a new base to propel us higher.

That's the data

No one can predict what the market will do on any given day.  Looking over the data and the recent historical performance of the 3 indexes, it's quite feasible for the market to make another  +10%  or more of the gains in the next 6 months.  4th quarter is our strongest quarter historically.  Looking over the data for the past 50 years, the last quarter median performance has been  +4.52%.  DOW  printing 30,000 by year end is quite feasible. 

Happy Trading!

Amin