For me, IBM has been the single stock market barometer of choice.
I established IBM 125 critical support on AUG 31 in MITA 643:
Message 11120339
..<Watch IBM. It should be rallying more on this big contract. It has been all over the board today. Big tug of war and signs of distribution. A close below 124 (should be no problem holding this level today) would be very negative for the stock, and hence the DOW. IBM needs two closes above 125 to keep the momentum bullish going, imo.>..
IBM immediately after this post re-established this 125 as support as it thoroughly broke-out on SEP 1st to close at 127 1/4 and never looked back.
IBM 125 for me established the line in the sand and the north/south bullish/bearish direction of the broad market.
Next I mentioned IBM 120 with IBM 118:
MITA 738 on Sep 29: ..<I do not like to see a weak IBM as we are at 121 3/8 down 2 1/4. This will act as anchor and drag down DOW from serious gains today..>...< A close below 120 is not good for the market.>...
We closed at 120 1/16 that very same day.
MITA 746 on Sept 30:
...<As for the markets, you are right on with this stubborn DOW 10,000. IBM has breached 120 intraday to 119 5/8 and has just had a nice bounce. I will not like a close below 118 for the rest of the market. I am convinced this would take out DOW 10K if this c1ose below IBM 118 materializes.>...
Today's breakdown below IBM 118 on a close (IBM 117 3/4 -3 1/4) is very important and will set the tone of the market going forward. A plot within a subplot. First, the important bounce off of the lows today (FRI)of $115 1/2 sets it up for this little bounce back to maybe 121-122 area intraday early next week. This second close Monday is imperative and must get her back above $118. It should get this close above 118. If, on the other hand, Blue is unable to accomplish 118 on Monday's close, it constitutes a technical failure and will take IBM down to that $108 area I have previously mentioned and take the DOW with it mentioned in MITA 743(to this DOW 9,770 level just established):
...<I have mentioned the disturbing break of IBM as it closed at the low of the day at $120. If we break $118, this pup is going to trend down to $108-$110 in a hurry and take the DOW with it below the psychological 10,000 level. I will like to take my profit on these puts soon.>...
I established puts in IBM in late AUG which was in line with my September prognostication of the market going down but I did not post - I talk to myself half of the time anyway:
The bottom line for me is that we are going to get this counter-trend rally that could last as little as one day but hopefully longer. IBM will be the key for me alng with my established NDX, BKX and SPX levels et al laid out. These indicators will dictate for me how long I will flap my bullish wings.
Have a great weekend. My wife Jennifer and I are celebrating our 9th wedding anniversary so I return late Sunday night.
Best Regards, J.T. |
