Waiting On The Dow Industrials
One reason for optimism regarding corporate earnings growth is the recent strength in economically sensitive stocks, with the Dow Transports, Morgan Stanley Cyclical Index, and Russell 2000 Index of small stocks surging to all-time highs in the second half of October. One reason for concern is the lack of confirmation from the Dow Industrials, which have yet to close above their Sept. 18 all-time high of 15,676.94. A move above that level would reconfirm the bullish primary trend under the Dow Theory. For now, our buy lists have 94% to 98% in stocks.