DOW trading near 13,000 - Careful!
4-20-07: The DOW trading near 13,000 could mean a sell-off is near. Every time the market reaches these historic levels, it is prudent to proceed with caution. Back in 2000, the DOW was trading near 12,000 and everyone thought it was going much higher. A few months later we witnessed one of the worse bear market in history. While today’s economic condition is much stronger than in the year 2000, these historic high is concerning.
If you are up on your position, this is the best time to consider taking some money off the table. We are not advocating selling everything, but consider converting some of that winning to cash. Do not make the mistake of thinking this bull market will last forever. What do you think? Will this rally last?
Comments
How do you feel about the oil industry? Do you think they will peak during the summer time or suffer along with the rest of the market if this is a major correction?
Posted by: Farzad | April 20, 2007 10:55 AM
Hi Farzad,
The DOW is composed of the most influential stocks from various industry. If there is a major correction, no industry will be spared, oil would not be immune. However, it would be a good time to buy more of oil stocks during such weakness.
Posted by: iBooyah | April 20, 2007 12:26 PM
How is today’s economic condition is much stronger than in the year 2000???
Today, people have 2,3 times mroe debt. Today the nations debt doubled to 9 trillions. Today we have less high pay jobs than 2000. Today the inflation is how many times higher than 2000. Today we are making as much as 2000. Today more jobs are lost. So can you please explain how so the econ is stronger than 2000. You bet you got be careful. If I were you, I will sell it all. Cause the end is near.
Oh buy the way, how much is the gas cost in 2000?
Posted by: mliu | April 20, 2007 01:41 PM
mliu, good question. The economic condition we are primarily referring to is corporate profits. Back in 2000, there were a lot of jobs just like today, but it was primarily in the dot com sector which as you know had no real business model. Whether you sell all or just sell some, locking in profits is always a good idea.
Posted by: iBooyah | April 20, 2007 03:41 PM
Why is everyone so scared of Dow being close to 13000?
It's highly likely that Dow will see 13250 this week. M & A activity will definitely push the market higher. No change in interest rates will keep the bull market going.
Posted by: RA | April 22, 2007 09:55 PM
We would love to see the DOW hit 13,000, actually. Past experience however has been that when the market reach such a milestone, the next thing it does it fall. For that reason, a lot of folks are cautious.
Posted by: iBooyah | April 23, 2007 09:38 AM
i might be sellin my oil stock soon. They have pretty much all hit their 52 weeks high and went even higher not too long ago. They are reporting less earnings. I will keep 1 stock in case and sell the other
Posted by: shraz | April 25, 2007 12:05 AM
Shraz, thanks again for your comments. You're great. Oil stock does appear to be headed for a fall. The recent appreciation was nice, but taking some profit is always an excellent strategy. Hope you made ton of money on the one you are planning on selling.
Posted by: ibooyah | April 25, 2007 02:47 AM
Goodthing I kept XOM ;) recorded nice profits.
I think we will stay in the 13K range as many big companies reported nice gains.
Posted by: shraz | April 26, 2007 01:03 PM
shraz, I do hope you are right about the DOW :-).
Congratulation with XOM. We are a big fan of oil stocks.
Posted by: ibooyah | April 26, 2007 02:28 PM