Market Direction Mid Week Update©

Market Direction: BULLISH alert issued 11/10/2016

Apple to the rescue, helps the DOW close at a record high... 

Over 3,000 points in a single year.

Just over five months after hitting 21,000 and over six months since hitting the major 20K milestone, the Dow Jones Industrial Average DJIA, +0.24%   made history again on Wednesday and closed above the 22,000 level. The 109-session surge to 22,000 is the eighth-fastest 1,000-point advance in the index’s history. It’s the third time the Dow has hit one of these psychologically important 1,000-point milestones this year. (See the full list of trading sessions between 1,000-point milestones here.)

Yes, milestones are just numbers, but they provide an opportunity to reflect, take stock and consider history.

The 22,000 milestone may have seemed a ways off at the beginning of the summer amid a pullback in tech stocks, but neither weakness in some of the biggest tech names, nor increasing doubts about how quickly President Trump can implement pro-growth policies has been enough to derail the Dow’s record-breaking streak.

And then along came Apple AAPL, +0.04%   earnings to hit 22K out of the park.

Related read: How each Dow stock contributed to the 22,000 milestone

On Tuesday, the Dow logged its 31st record in 2017 on the back of upbeat earnings, shaking off less-than-stellar reports on manufacturing and inflation. Then in after-hours trading, shares of Apple rallied to trade at record levels after the tech giant turned in stronger-than-expected quarterly earnings and iPhone sales that met expectations. Apple’s rally was more than enough to push the Dow over the 22,000 threshold on Wednesday.

The rally from 20,000 to 21,000 earlier this year happened over 24 trading sessions, matching the fastest-ever 1,000-point advance to a milestone level in the index’s history, when it rallied from 10,000 to 11,000 in early 1999. And the rally from 19,000 to 20,000 was the Dow’s second-fastest such advance, since the 59-session span between 13,000 and 14,000 from late March to early July 2007.

In the past, the index has struggled with major milestones for years. It first touched 1,000 in 1966 but didn’t close above that mark until November 1972. And the Dow first crossed 10,000 in 1999, but only really took up residence above that milestone in 2010.

The Dow has seen no such struggles in 2017. The blue-chip gauge has steadily climbed, and has been powered in recent weeks by earnings-driven gains in several heavyweights beyond just Apple, including Chevron and Intel. Shares of plane maker Boeing Co. BA, -0.62%   have been a key driver of the Dow over the past six months and notable over the past week.

However, there are some warnings and red flags for those investors looking to curb their own enthusiasm. Despite what has been a very positive earnings season so far, a Bank of America Merrill Lynch analysis says investors are overlooking signs of potential trouble ahead.

Meanwhile, plenty of market watchers and high-profile investors have been sounding the bubble warning all year (though Warren Buffett isn’t one of them). Then, there’s the Federal Reserve and other major central banks beginning to unwind their multi-trillion-dollar bond-buying programs (which Jamie Dimon has said investors are not ready for), tensions rising with North Korea (the biggest black swan of all?), all of the still unknowns surrounding what specific stances Trump will take on trade, and increasing doubts over the president’s ability to pull off tax reform.

But, hey, given how 2017 has gone so far, it may not be so long before we’re back to updating this article all over again.

$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at  $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, email us. Share with a friend.

The all-time highs since our initial recommendation to go LONG this market. Here is how the markets have performed:

Stock Market Direction Recommendation (11/10/2016)
Dow	up 3,228.22 points a 17.16% gain	8/2/17
Nasdaq	up 1,252.04 points a 24.04% gain	7/27/17
S&P 500	up 316.57 points a 14.61% gain	7/27/17

Related Link: http://www.stockmarket-direction.com/