This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

2005: A Move Higher, Until...

The market should move higher next year, but don't expect a repeat of 2003's bullish advance. The economic expansion may run out of gas in the months ahead, and the next recession could emerge in the next 24 to 48 months. In turn, this might trigger the next leg in the secular decline that began almost five years ago.

Past price action can predict the market's future with great accuracy. As it turns out, the fall rally is sitting just above levels that have triggered key reversals in the past, and despite the current euphoria, it may not be any different this time around.

Let's rewind a few years and examine the crosscurrents moving the ticker tape at that time. I believe that volatile time period holds the key to market direction next year.

The first wave of the bear market dropped the S&P 500 index to the March 2001 low at 1081. The 22% rally that followed the low had folks thinking the correction was over. In fact, the Dow came within striking distance of its bubble high by May of that year.

But the move fizzled out, and the indices began a long decline back to their March lows. I still remember how the S&P 500 bounced strongly on the day it returned to this price level. That was Sept. 10, 2001, and the solid close had traders expecting a rally to start the next morning. Of course, things didn't turn out that way.

The market started a new advance when it reopened on Sept. 17. This move took the averages back above their March 2001 lows, and again raised hopes for a renewed bull run. But the post-Sept. 11 recovery lost its footing in December when the S&P 500 rolled over at 1173.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $130.13 -0.22%
FB $80.72 0.39%
GOOG $554.99 -0.09%
TSLA $207.19 0.00%
YHOO $44.40 -0.11%


DOW 18,214.42 -10.15 -0.06%
S&P 500 2,110.74 -3.12 -0.15%
NASDAQ 4,987.89 +20.7530 0.42%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs