W is for Winning!

• Posted by Greg Harmon
• on October 30th, 2013

With the move Tuesday the DJIA is now less than 30 points from making a new all time high. It already made a new closing high Tuesday. This ‘W’ in the chart will or does confirm the Dow Theory and a renewed trend higher, joining the new high in the transports. A silly old system from the days when there were like 50 stocks trading. But can you really discount the fact that nearly all of the major indexes are making new highs? Top pickers are still making a robust living explaining why it cannot continue or pointing out that it is only because of the Fed’s continuous and perpetual Quantitative Easing. But do you really care if the money in your account came from the supportive Fed policy or good earnings or increasing multiples? If you are an economist and concerned about the health of the economy then maybe these matter.

But money is money where ever it comes from and I am not going to give it back because it is from the Fed if that is the case. Sentiment, momentum, alternative asset classes like bonds and what is happening in the rest of the world all play a role in how the stock markets move. And all of those factors are showing that the markets are going higher. End of story. I do not need to pick a top or decide that it is for ‘the right reasons’. The market will tell me when it is done rising and wants to move lower. I may miss some of that initial move off of the top and not get the fame and glory of being the guy who called it to the day. I am ok with that. I do not have time for all the television appearances that type of a prediction would require anyway. I have money to manage and trading to attend to. So back to the grind for me.

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