Want to learn about some basic signals that exist in the stock market? As the Dow Jones Industrial Average and S&P 500 Index have recently risen to five-year highs and moved within reach of their highest level on record, speculation has started to brew that these values could be signaling the start of a bear market, according to MarketWatch.
The Dow rose above 14,000 on February 1, which was the first time this group of industrial stocks surpassed this key benchmark since October 1, 2007, when it finished the day at 14,087.55, Financial expert Robert Klein notes in a MarketWatch opinion piece.
Klein observes some important differences between the recent climb that the Dow made to 14,000 and the ascent that happened in 2007. The recent rally enjoyed by the group of industrial stocks started at a level of 12,716 on February 1, 2012, which means that it appreciated a total of 10.2 percent between then and the same day in 2013.
This roughly 10 percent gain compares with the 2007 Dow rally, in which the index surged 20.7 percent between October 2, 2006, and October 1, 2007, Klein notes.
It is very difficult to predict the future direction of the market, the retirement planner reminds us.
In a separate report, MarketWatch notes that while retail investors have been putting a larger amount into stocks, you cannot depend on such trends to project where equities will go in the future.
While some believe that the renewed interest in this asset class will extend the existing rally, others believe that the high value of U.S. stock indices means that the markets have reached a top and will soon decline.
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