Stock prices, as measured by the S&P 500, continued to behave in a very orderly fashion through January 2012, rising from an average level of 1243.32 in December 2011 to 1300.58.
This month-over-month change puts the overall level of the S&P 500's index value at the upper end of our forecast range for the month. Or would have done so, if we had not discontinued publicly offering our forecasts!
The reason stock prices are rising is because investors are expecting a rising level of dividends per share to be paid out in the future.
In response, stock prices have swung from the low end of our forecast range to the high end.
With the stock market behaving in such an orderly fashion, it may now be possible to fully switch over to our statistical control chart-inspired methods of monitoring the market. We haven't been able to do that since December 2008!
What that means is that we can now apply additional tools to project both where the market may be heading and whether the market will continue to proceed in an orderly fashion.
For investors, that matters because periods of order in the stock market, where the change of stock prices with respect to their underlying dividends per share may be described by a Gaussian, or normal, bell-curve type statistical distribution typically coincide with sustained increases in stock prices.
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New Time 11:20 AM PT: Get the Market Movements in Advance: William's Edge Webinar for Thursday April 24th, 2014 | John Ransom