Thinning fumes for the Dow Jones index

The Dow Jones has been rising on a wave of hope that the recovery is well underway, says John C Burford. But is that enough to sustain the rally?

On Friday, I wondered if the bull market in the Dow was running on fumes. And this week, we have had a barrage of bullish' economic reports and forecasts for several major economies. For instance, the IMF (International Monetary Fund) has upgraded its projection of GDP growth for the UK from 1.9% to 2.4% in 2014.

But that's not all the big hitters are in Davos. And it seems most of them are very bullish on stocks. Two of these bulls are, in fact, the biggest US hedge fund managers! Here is a quote from one of them that I believe captures the spirit of this market: "The US economy hasn't taken off. It's doing OK. I'm hopeful that growth will pick up..."

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.