Monday, January 30, 2012

Friday, January 20, 2012. DJIA closed at 12,720.48 today. In April 2011 I predicted the DJIA would end the year 2011 at 12,700 and then push up towards 13,000


Friday, January 20, 2012. DJIA closed at 12,720.48 today. In April 2011 I predicted the DJIA would end the year 2011 at 12,700 and then push up towards 13,000 in January. I was off a little bit on my timing but fairly close. So what will the stock market, as indicated by the DJIA, do in 2012? This is what I predicted in April of 2011, and I still don’t see any reason to change it.
“In January 2012, the market will test out new highs. That would mean that it will break through the 12,700 barrier and run up into the 13,000s. After exploring the 13,000s for a while, it will discover a new psychological "top".
“That could be as low as 13,100 or as high as 13,500. But the economic recovery will still not be on track yet nor very strong. So I predict 13,450 maximum. We have to remember another important factor here: the 2012 presidential elections.
“Incumbent presidents always want things to SEEM LIKE THEY ARE GETTING BETTER just at the time they come up for re-election. And it does not matter how bad it has been: people lose perspective. So as long as things are improving, they stand the best chance of being re-elected for another term in office.
“Since presidential advisers all know this behavioral pattern, they know they must obey it. It gives them an incentive to "dump" all the bad news they have into the markets during their first few years, so that things will be improving come re-election time. I think that may explain a lot of the situation we see now.
“The executive office (president) will start "priming things up" very soon, and we will see what they call a real economic recovery begin to form. It will not be anything really dramatic, but it will be just enough to get Obama and his group re-elected.
“Prediction: Obama re-elected in 2012 with 50.4 % of the popular vote. The Republican candidate will get 46.7 % of the popular vote. Obama will get 74 % of the electoral vote and most of the same states as he won in 2008.
“Ohio is a "toss-up". Obama has visited there 13 times already. He is campaigning hard for Ohio. It has high unemployment, a large population and is a "swing state". It could go either way. Obama will win it given a "decent" economic recovery. He will lose it if the economy falls off track.”
"I've basically been a Democratic voter, but I won't vote for Obama again," said Rozell, 61, standing outside the steel plant, which was belching smoke into a drizzly Ohio afternoon. "I don't like the bailout, I don't like taxes, I don't like talking about trillions of dollars of deficit. Here in Stark County, which has voted for the winner in every presidential election but one since 1980, the concerns of people like Rozell and Sweitzer reflect the challenge confronting President Obama. Despite blue-collar job creation in steel mills, ball-bearing manufacturers and meatpacking companies, many working-class white voters here, and in much of Ohio, say they have reservations about him this time around. Although this swing state's 20 electoral votes went to Obama in 2008, the latest poll from Quinnipiac University suggests a tight battle, though it is still 10 months before election day. In head-to-head matchups against the president, Romney and Gingrich each were favored by 43% of those surveyed to 42% for Obama. I just don't think he's doing the job," Sweitzer said. On Wednesday, the president will make his 17th trip to Ohio. He will be talking about the economy, though voters here have other concerns too.”

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