Start Paying Attention To The Dow Jones Model

Includes: DIA, SPY, TWM
by: The Other Street

I have been looking for S&P 1600 for a while now, and maybe higher depending on political outcomes, mainly in the US. What the model does is fine tune the short term. I issued a warning last Tuesday, and a cover on Thursday. Quite frankly, I hate to do this. For one, I am not paid for the advice. For two, it takes me away of the others things I can do, like watching the Olympics. So, make no mistake, at some point I am going to ask you to foot the bill - provided you agree that my "system" brings you value.

Because of the currently low readership on the Dow Industrials Model, I will keep my comments to a minimum. As of this writing, Thursday evening, it suggests a rally is in order to the 13000 level. If you want to know more, just comment on the article. The point is, we tested the top, we tested the bottom, so it seems the Model is working.

From a fundamental standpoint, here is the skinny: what Mario says, Mario will do. Same goes for Dr. Ben. The headlines make the volatility. The Model is just a tool to be used at the margin. In a low return environment, you tell me if it's worth to you. To me, it's worth a standard deviation.

From a market standpoint, this "sell on the no news" was scripted. It does not have legs. We are still on the road to S&P 1600 - a long and winding road.

Disclosure: I am long ADES, AGM, EXH, MXWL, PHM, ODP, URI, TMO.

Additional disclosure: I am long my usual stocks. for a couple of days I covered with TWM and puts on HYG, but I usually am not that trigger happy.