Remember back when I said we would likely see 13,000 again on the Dow? Well, this may be that time. Even if we don't see 13,000 directly, there is likely to be a lot of volatility in individual stocks as we proceed through earnings season. This should translate into some great buying opportunities.
Keep your stink bids in.
Right now, the Dow Trans has refused to break support at 4,847 (on the daily charts) or 4873 on the weekly charts. Because this ain't happening, I suspect that insiders have some clue that profits are on the way. We'll see. If the Trans holds support going forward, watch for the correction in the Dow to be muted as well. If the Trans breaks support, there's a good chance the Dow will take a harder correction. It doesn't matter why, it just matters that it will happen one way or the other eventually.
The one thing that can turn the markets around is the Fed announcing this month's bond purchases. Although, this may simply fuel the irrational bond market bull. You know the old saying ... the markets can stay irrational longer than you can stay liquid. So through all of this, don't fight the Fed by making contrarian bets just yet. That time will come, but that time is not yet. In fact, it may be time to buy a bond or two if you rely on income. Also, dividend paying stocks are the most likely to a) not correct as hard and b) follow counter trends during market weakness. Keep that in mind as well, but don't go chasing waterfalls here folks.
