Indications of a Bullish Market Ahead
Wednesday, May 23rd, 2007
By Mitchell Clark, B.Comm. for Profit Confidential
With the main stock market averages hitting new highs and the NASDAQ at a five-year high, it’s hard not to be bullish over the Near term.
I have to admit, at the beginning of the year, I wasn’t all that fired up about the stock market’s prospects. My view was pretty much the same with the Street’s general consensus that slowing economic growth would translate into a lackluster stock market. Going by the performance of the economy and the stock market in the first quarter, that view was off the mark.
Even though stock market psychology remains mostly the same and market cycles tend to repeat themselves, any given situation never repeats itself exactly. Clearly, I didn’t think that the stock market would roar ahead during a time (the first quarter) when GDP growth was the slowest. There is a new dynamic to the stock market right now.
As I’ve mentioned before, the stock market is always thinking about the future, never the past or present. What is changing is that the market’s time horizon for future performance is increasing. In my mind, the first quarter’s stock market performance said, in effect, “Why worry? Things are going to get better anyway.” It’s a clear indicator of the resilience of American investors and the business community.
Getting back to the point, my market view is getting increasingly bullish for this year. I never like to go against the prevailing trend in the stock market, and that trend is up.
A lot of companies announced in their first quarter earnings reports that they expect the second half of this year to be better than the first half. All things considered, the economy is stronger than the Street gives it credit for. If I was a betting man, I’d say it’s full steam ahead for the stock market.
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Tags: GDP, GDP growth, stock market
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Mitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.
