Breakout Imminent
Look at the chart(s) below. Do you not agree that a breakout is imminent? OK, which way? If you buy my thesis that I have espoused recently that the DJIA is headed for 30,000(only 5% away) then one can pretty much presume IBM is headed higher.(the 5+% yield offers considerable support) All the other averages except the Russell are at all time highs. Classic market history and analysis shows that when the market tops, the DJIA is the last to make new highs, usually at a big round number, and amongst great fanfare. Newspaper headlines, magazine covers etc. I contend that before the election you will see a decent rally in IBM to around 150. Not anything to write home about (20%) but great if you buy November 130 or 135 call options, or 125’s for less risk.
I would urge caution here for the stock market. The NYSE Advance-Decline line peaked on August 12 while the SPX has continued to rise. The NYSE Advance-Decline line peaks before the market does.
Fits in. You are likely to see massive divergences if we are indeed reaching an inflection point. I am still waiting for the Nasd 100 to top. DJIA will be last at 30,000.