Well, considering what just happened to DOW over the past 10 days? We should be at 30K in about 2 weeks at the current rate. So yer prediction is good.
Probably the best strategy for now. However, your prediction and election reasons of 4 months ago could apply now... so far this week the VIX has been surging in the face of new hights by the S&P, even today the VIX was 1% up and the VIX futures are a full 5 units above that, this indicates that smart money is not comfortable with current levels and although not willing to sell, is buying insurance against a sell-off.
. When I say Dow 30k+, I mean much higher than 30k. Although I absolutely believe it will happen because I will go all in, there is an obvious reason I haven't yet. I will long Nasdaq today and close end of trading day. There will come a point when Dow will take over this time I believe, just like how Nasdaq took over the rise earlier.
My assumptions doesn't all apply anymore unfortunately. Perfect scenario was a low for Dow in the summer and then a major erection into the election. The election itself is going to be mad, mail-in votes etc. Volatility is expected to rise and could temporarily go either way very fast. Just not safe to swing trade right now. I agree with you on VIX. I think the highs will still come in Nasdaq for time being but the machine has started to rattle. What is your trading strategy for the immediate future?
Positioning myself for a sell-off to at lease the 200-day average (3,090 for S&P which also happens to be the level pre-23rd March), being the level were most dumb-money technical traders, blind to the fundamentals and hooked on RobbinHood & helicopter money, would resume buying, however, if smart money decides to take profits and let the fundamentals dominate again, the sell-off will be much sharper, binoculars will then be needed to see a 30k DOW
I'm targeting a DOW at around 24,500, i.e. back to May20 levels. This is the level that fits the current fundamentals and what I consider fair value without discounting for uncertainty of elections & virus, however, I'm not too confident that it will get there... would be good if it does as then trading can be tied to earnings rather than euphoria. I don't think US markets will ever return to the March20 lows but a 22,500 DOW is possible if a black swan happens and markets overshoot fair value. Perhaps a messy election where neither Trump nor Biden is a clear winner and Pelosi takes the presidency might do the trick. Even though elections are in just 2 months, markets have not yet factored-in this possibility nor the uncertainty a Biden win will create, in fact, markets are currently not factoring-in anything other than what the Fed is doing, ever uncertainty is being ignored... this is the first time that I have seen markets rally in the face of so much uncertainty. .
You have to remember that the DOW will now behave a bit differently than it has in the past, with the swap of those three companies plus the AAPL stock split.
A touch of genius by Cooke and Musk... flog the "cult" factor to the fullest while the RobbinHood traders are on steroids.... The action increased their personal worth by doing nothing.
Over the past two days, their worth unrealized net went down a lot. And so did everyone else's, unless they did some funky option plays.
I think late Thursday or Friday will tell us if US indices are in decline for another month or not. Dow already drop less than Nasdaq so by the looks of it, it should also drop less than Nasdaq and then the surge upwards to 30k+.