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Christopher Lewis
dowWEEK

The Dow Jones 30 as you can see went back and forth during the course of the week, ultimately settling on a somewhat neutral candle. However, this shows that there is a significant amount of support below, so we feel it’s only a matter of time before this market rallies. With this, we are buyer’s longer term, and believe that ultimately this market will reach towards the 18,300 level yet again. It may take a couple of weeks for the buyers to really push this market higher though, so patience will be needed. Once the liquidity comes back into the marketplace, we believe that the Dow Jones will go higher as we are currently in the middle of the summertime vacation season, and as a result you have to wonder whether or not there is enough liquidity to have real moves.

Quite typically, you hear the expression “sell in May and go away.” The truth of the matter is that most summers are fairly quiet, because most fund managers have their vacations then. Typically, you have junior traders running the desk, meaning that most major decisions are not made during this time period. Ultimately, we believe that this market will reach towards the highs yet again, but we need more money flowing into the market in order to make this happen. We recognize that the 17,000 region is massively supportive, and it will be difficult to break down below there. Quite frankly, we have no interest in selling, simply because there’s far too much in the way of support for a higher marketplace. Yes, the US dollar has strengthened overall, but we are starting to see better economic numbers in general out of the United States. Besides, most people would prefer to put money to work in the United States as opposed to other countries that are still suffering economic struggles. With this, we believe that all US indices should go higher, and the downward course won’t be any different as a lot of the so-called “blue-chip” stocks are found here.


 

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