Today the Dow Jones Industrial Average posted a close above 10,200. This achieves our Marketdoc Report target of 10,200 first talked about in our July reports. The S&P is closing in on the 1101 level. The market "experts" are now telling everyone that this market "could go higher." Where were these "experts" in July when almost everyone was worried about the end of the civilized world? Now they are telling everyone this market is for real because THEY MISSED IT! The truth is they really do not understand what makes this market run.
For a better idea of how the trend will play out, sometimes it is good to look at other indexes like the NYSE Composite. This index is a more broad index of stocks. As I assess this index it is clear this index is finishing its "topping" formation. We see this topping formation in the Stochastics, Williams %R, and MACD indicators. Unless we see a significant surge upward the index will probably break down around the 7241 level. The Dow has technically broken out above its yearly high of 10,128 which is why we need to look at these other indexes to CONFIRM the breakout. The S&P needs to breakout above the 1101 level. If they do not, then we will see our pullback. Be careful as the other "experts" tell you to join the party just as it is about to end. They used to call it a "suckers rally" when technical resistance levels are breached but then quickly breakdown as the last holdouts jump in. It looks like a pretty good time to establish some puts against those stocks which were bought at bargain basement prices and have risen skyward since March. Now is a great time to lock in profits. Stay tuned to the Marketdoc Report and you, too, can learn to recognize these important patterns in the market. Take a look at our previous posts and you decide if we have called it.
Note: The above is for information purposes only. Any decision to buy, sell, or hold a specific investment for a portfolio should be reviewed by your own personal investment advisor.
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