Nasdaq 2017 = Dow Jones Industrial Average 1950s? Ultra bull market ahead?

Looking back it wasn't surprising that the US stock market would enter a correction at the Nasdaq 5000 range.  This was the previous year 2000 top (~5200).  Breaking through this level required more conviction on behalf of the market as it signified the Nasdaq was finally leaving the dot.com bubble top behind it.  Market watchers have been focusing on Dow 20000 and S&P500 2400 but I think the Nasdaq is the index to watch.

After the 1929 top, the Dow finally reached new ATHs in the early 1950s AFTER which a 18 year bull market followed until concluding in 1968.  The post 2000 Nasdaq has a very similar chart to the post 1929 Dow.  Some differences being that consolidation in the Nasdaq post 2000 was more constructive and shorter in duration than Dow consolidation during the Great Depression.  From absolute top to bottom the Nasdaq corrected less than the Dow and reached new ATHs sooner.  One can suggest that the modern Nasdaq has shown more resilience than the 1930s Dow.  If the Nasdaq follows a similar pattern of Dow 1950 we can expect a long and powerful bull market ahead.

Vanguard Canada Must Own ETFs for Canadian Investors. VUN and VFV.

Vanguard Canada provide the best and cheapest ETFs available to Canadian investors.  Two must have ETFs for Canadian investors are the US Total Stock Market ETF (VUN) and the S&P 500 ETF (VFV).  Both are NOT hedged and provide broad exposure to the US stock market and the US dollar. They are the cheapest ETFs of their kind and have extremely low management expense ratios (MER).  The MER for VUN is 0.15% while the MER for VFV is a category low of 0.08%.

Biotechnology & Health Care Stocks & ETFs Continue To Lead The Stock Market Higher

Biotechnology and health care stocks and ETFs continue to lead the market.  This is becoming a dominant theme within the broad technology sector.  It is likely that health care and biotechnology stocks continue to grow in relative market cap weight in the major US indices (i.e. NASDAQ 100 & S&P 500).

Market In Correction?

According to Investors Business Daily, the market has experienced a high enough number of distrubution days relative to accumulation days to make the liklihood of a correction in the US indicies likely. Depending on how today plays out, they may issue a "market in correction" verdict in their Big Picture column later today.

They may be correct. We could experience another correction. However, the intensity of selling this time is reminding me of the May 2006 correction rather than the 2008 crash. I think the downside this time is limited given where we stand currently. It will be difficult for the DOW and S&P 500 to spend a significant amount of time below their important respective psychological 10 000 and 1000 point levels. Any significant move below these levels, should bring in institutional value investors in addition to technical support buyers.

Solar Energy

"If we could harness only 0.03% of the sun's light, we would have more than enough energy to power the entire planet"

This is a remarkable statement made by more than one scientist on the solar energy debate. Although solar energy is far more expensive to produce than other sources currently, we could be close to a tipping point where it becomes much more competitive and efficient.

This ETF is obviously not pricing in a solar energy revolution. In fact, solar energy stocks were crushed along with all energy stocks during the 2008 market crash. Currently, solar ETFs seem to be trading in a similar fashion to other energy related ETFs. The Market Vectors Solar ETF (KWT) is a relatively new ETF with little price history. Its major holdings are listed below.

TOP 10 HOLDINGS (67.25% OF TOTAL ASSETS)

Company
Symbol
% Assets
Canadian Solar Inc. CSIQ 4.18
First Solar, Inc. FSLR 9.64
MEMC Electronic Materials, Inc. WFR 10.16
Q-CELLS QCE.BE 4.48
RENEWABLE ENERGY REC.OL 11.45
SOLARWORLD SWV.BE 4.14
SunPower Corporation SPWRA 4.45
Suntech Power Holdings Co., LTD STP 9.47
Trina Solar Limited Sponsored A TSL 4.82
Yingli Green Energy Holding Com YGE 4.46

If solar energy is to become the dominant energy source in the not-so-distant future, solar energy related stocks should start to be priced less like energy stocks and more like technology stocks. I anticipate that traditional energy stocks will lag the market for some time. Solar energy companies should eventually prove to be market leaders sometime in the future.