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5 Reasons Why Stocks Will End the Year With a Bang


There's reason to be optimistic about a solid finish to the year.


Apple (NASDAQ:AAPL) paid a visit to its 50-day moving average Tuesday, and just when it looked like the bottom would fall out, buyers came into the market and lifted Apple -- and the broad market -- off its lows. The day's action showed that bulls remain in control for now.

The bear argument goes something like this: Weakness in the transports can't be a good thing for the market; third quarter earnings season will be a disappointment and it's only a matter of time before Apple takes out its 50-day simple moving average with conviction.

Of course, they're all legitimate concerns, but there are plenty of other good things going on in the market right now where a glass-half-full perspective is warranted. Below are five reasons to expect a solid end of the year for the stock market:

Market Leaders Acting Well: Bullish charts in my growth screens outnumber bearish ones by a wide margin. Every single name in the Ultimate Growth Stocks model portfolio continues to hold above support, showing little in the way of sell signals. There are plenty of broken stock charts out there, but not when it comes to the real market leaders. If the market was really in trouble here, leading growth stocks would be flashing sell signals. They're not.

Weak US Dollar: Not everyone likes a weak greenback but the stock market sure does. The good news for bulls is that it doesn't look like the US dollar is ready to start a meaningful uptrend anytime soon. Fed policy has a lot to do with it, and the Fed's position isn't likely to change anytime soon. The dollar remains in a technical downtrend, showing poor relative price strength. It's stuck underneath its 200-day moving average at 80.71 and its 50-day moving average at 81.36. Both price levels could be resistance levels.

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No positions in stocks mentioned.

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