Dow Stock Market Trend Forecast 2015

February 6, 2015

The stock market has had wild roller coaster ride during January in the wake of the euro-zone crisis where one of the best days of the year (+275) is immediately followed by the worst day of the year (-335) the effect of which is to literally grind the strength out of the stocks bull market rally of 2014 with stomach churning moves that have been encouraging the perma-bears to literally scream at the top of their lungs that this time, THIS TIME the bull market really is over! Which has been regurgitated at length by the mainstream media and BlogosFear backed by supporting reasons coalescing around euro-zone collapse, end of Fed QE, and possible interest rate hikes being just around the corner, all of this despite the FACT that stocks actually do quite nicely during the early years of RATE hiking cycles! In fact its rate CUTS that stocks bulls need to worry about for they signal WEAKNESS ahead. Then there’s China weakness, Europe recession, ISIS and not forgetting EBOLA! So plenty of doom for the bears to play pick and mix with for reasons why Bull Market End Time is here!

Why Invest in Stocks?

Yes the stocks markets are manipulated where the manipulation reveals itself in the price charts. However, how do you think the rich continue to get richer every year whilst the rest (workers) have seen their earnings stagnate or FALL for a decade!

The rich get rich by leveraging themselves to the exponential inflation mega-trend by owning income generating capital assets that 99% of workers (wage slaves) service and will never be able to obtain as a consequence of debt and inflation as they find that the purchasing power of their earnings is constantly being eroded by real inflation that never tends to match the governments inflation indices and by virtue of real inflation most people in a society become vested interests towards political party bribes whom they are expected to vote zombie style at each election to continue to be in receipt of hand outs (printed money) to fill the gap between earnings and inflation, a gap in economic productivity that is continuously being siphoned off by the elite as a consequence of the elite holding most of the income generating assets in society. Thus Inflation + Capital results in an spiral towards which the wage slaves own less and less capital whilst the elite continue to concentrate wealth in their hands.

This is why house prices have been rising whilst real terms average wages have been falling because the wealth the economy generates is further being concentrated into the hands of the elite who re-invest it into capital assets such as property pushing up prices which further reduces available supply for the wage slaves hence why most people including academic economists just cannot understand how house prices can be rising when average earnings have been falling. THE WEALTH GENERATED BY THE ECONOMY (wage slaves) IS BEING RE-INVESTED BY THE ELITE INTO CAPITAL ASSETS SUCH AS HOUSING and Stocks, and this is a reinforcing cycle that ultimately ends when the elite (0.1%) own virtually ALL of the assets (over 90%) resulting in a society that is PRIMED for a REVOLUTION!

Stocks Bull Market 2014 Review

The stocks bull market raged on for another year to close at Dow 17,823 (+7.5%) following the Dow's most recent all-time high set just a few days earlier at 18,103. This despite widespread calls of bear markets and even crashes that coalesced around a series of bad news events such as surrounding the US debt ceiling triggering a government shutdown and not forgetting October’s end of QE apocalypse, with such doom calls always reaching their most vocal just at the end of every correction.

In the real world my automatic response to people asking me about what’s happening to the stock market is to say "It's October, this is what always happens in October before we get the Santa rally."

Therefore 2014 was another year for my very, very simple investing strategy that once more paid off, and which I iterated throughout the year -

" The Greater the deviation from the stock market high then the Greater the Buying Opportunity Presented".

Furthermore, I brought forward a reminder of what to expect at the worst point of every correction -

3 Oct 2013 - U.S. Government Shutdown Great for Stocks Bull Market, Bears Will be Crucified Again

I keep being reminded of the movie SPARTICUS where the slaves are lined up at the end just like market commentators line up at the depths of market corrections to once more proclaim that they too are ALL Sparticus! Calling THE Top! However, we all know what happens at the end of the movie, as they all end up getting crucified, and we don't have to look far to see what happened following EACH end of the bull market final top call of just this year! Let alone a bull market that is now well into its fifth year.

The bottom line is this the US government shutdown is GREAT NEWS! because for bull markets to persist and continue they NEED BAD NEWS every few months, THEY NEED MOST PEOPLE TO BE SKEPTICAL, TOO AFRAID TO INVEST! And so it continues to be the case for the DURATION OF THIS BULL MARKET, where over 90%, NINTEY PERCENT OF Market commentators have been WRONG and continue to be WRONG, Everyone who has just proclaimed its END IS WRONG and Will BE CRUCIFIED, just as they have been crucified at every market turn for the past FIVE YEARS !

YOU WANT TO LOVE MARKETS THAT ARE HATED!

YOU WANT TO BE AFRAID OF MARKETS THAT ARE LOVED!

UNDERSTAND THIS - THIS stocks stealth bull market is one of the GREATEST bull markets in HISTORY!

of course a real life crucifixion would mean the fools would would ceased and desisted in their demented ramblings, but that is one of the negatives of the passing of the Pagan Roman Empire. Instead the so called market commentators march on as if nothing happened despite spouting more garbage because clearly they NEVER put their own money on the line, which is the real secret for arriving at the most probable outcome. This is why virtually every time I write an article on the stocks bull market I get so many comments and reasons to explain why I this time I am wrong and it has ended.

Instead I have to reiterate what I have voiced for the duration of the stocks stealth bull market.  My strategy has been very, very simple, no black box voodoo to sell garbage to the unsuspecting masses but simply this - " The Greater the deviation from the stock market high then the Greater the Buying Opportunity Presented". And, you can't get any simpler than that !

My last in-depth analysis of the year concluded in the following trend forecast into the End of January 2015.

12 Oct 2014 - http://www.gold-eagle.com/article/stocks-bull-market-over-are-bears-about-breakeven

Stock Market Forecast Conclusion

My final conclusion is for the Dow to continue its volatile trend lower into Mid November towards 15,350 , probably bottoming out around 15,500. To be followed by a rally to 17,100 by the end of this year, following which I expect a weak January with Dow probably ending the month below 16,500 having traded down to 16,350.

Dow stock market trend

That I subsequently refined in November to conclude in an end of year trend to above 18,000 ahead of a significant January correction -

23 Nov 2014 - Manipulated Stock Market Short Squeezes to Another All Time High - The China Syndrome

My long standing view remains that the stock market rally will continue into the end of the year when I expected the Dow to be trading north of 18,000.

EBOLA PLAGUE

The mainstream media focus may have shifted elsewhere but the Ebola plague continues despite desperate attempts at containment which have partially succeeded in some areas. However, Ebola cases and deaths are still doubling every couple of months to now stand at 9,000 dead and 22,500 infected.

Therefore despite some positive developments in terms of buying time to produce a vaccine and treatments in enough quantity to make a difference, Ebola still represents a major black swan risk for the global economy for the whole of 2015.

Stock Market Fall Out

In terms of stock market trend so far the outbreaks have been contained to West Africa and thus had little effect on stock market trend. Which as long as this trend persists apart from the occasional story of a patient here or there which the markets have now grown immune to, then so should the stock market shrug off Ebola for 2015.

Where stock investors are concerned, a number of biotech stocks in a race to deliver an Ebola cure that I am sure many of the worlds governments will be forced to stockpile at great expense just as they did with Avian Flu. There are several contenders such as ZMapp which cured two U.S. healthcare workers. However the problem is in gearing up production of these potential vaccines to the quantities that governments are demanding which is still near a year away.

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Source:  http://www.marketoracle.co.uk 

Nadeem Walayat has over 20 years’ experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 120 experienced analysts on a range of views of the probable direction of the financial markets.

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