NASDAQ Rally Erases DOW Loss
At one point today the DOW was down about 80 points, trading at the 17120 level. By the end of the day the DOW closed up 15 points at the 17230 level. At one point the DOW was down 10% for the year and now it is only down about 3.5%. With 51 business days left in the year I am 100% certain that the low of 15379 will hold for the year. I am looking for a pullback in the DOW to make a higher low in the 16500-17000 range. If we do get this pullback along with a somewhat oversold condition I would be looking to buy names such as Starbucks (SBUX), Home Depot (HD), and Disney (DIS). I would also be looking to buy ETFs (exchange traded funds) such as DIA, IWM, SPY, and QQQ. I do believe that the DOW will erase the loss of 3.5% and possibly make single digit gains by the end of the year.
I have a buy signal on oil on the weekly charts, however oil must hold above 45.47 on the daily charts. Today oil closed at the 46.50 level. I am on the sidelines waiting to see how oil reacts in the next 1-3 days. If oil closes below the 45.47 level on a daily basis, I believe oil will have problems in the following couple weeks.
When gold got up to the 1191 level I stated that gold was significantly overbought. Today gold traded down to the 1170 level but gold is still not oversold on the daily charts. If gold gets oversold I would look to buy gold and gold stocks in anticipation of an oversold bounce that should last 1-6 business days.