From the Trading Desk

IBM Leads Dow; Stocks Higher Again

After posting its 22nd consecutive decline in revenue IBM indicated there is light at the end of the tunnel sending the stock higher. The blue-chip technology stock helped the Dow gain more than 160 points on the session. Volume was higher across the board as we continue to hit all-time highs. This market has been tremendous even has overbought conditions persist. Volatility has remained low and we have yet to see any signs of pressure to sell stocks. Now, overnight futures are indicating some weakness. However, it remains to be seen if there is any follow-through to the downside. Our stops are in place to protect us from the downside if any stock were to reverse against us. We are still in an uptrend and we’ll see what today brings.

Think about how many people have been trying to pick a top! There have been quite a few and they have been wrong for quite some time. August was not a great month, but we didn’t see any sort of correction. We have a lot of continuation patterns which is nice. However, we are lacking the juicy patterns that yield TREMENDOUS gains. As soon as we get a proper correction these patterns will show up and high-flying gains will return. Perhaps this is a bit optimistic, but we must be prepared for anything. We harp on money management rules or better yet a risk management process so we may take advantage of any market presented to us. We must have capital!

No need to take this further for now. Given where futures are we may have more to chime in about with regards to price action. Volatility has been on the back burner and until we see a proper correction we are not going to get the juicy patterns. Who knows where this market is going to take us, but we are prepared to react accordingly!

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