• Not just a large cap rally
• Large speculators covering shorts on rally

Monday the Dow Jones Industrials index moved to new all time highs. Using PCM’s proprietary trend indicator, 25 of the 30 stocks in that index are in a weekly uptrend. Additionally, 81 stocks in the Investor Business Daily’s top 100 stock index are in a weekly uptrend. It is encouraging to see the IBD 100 stocks, which are generally much smaller yet faster growing companies, participating in the rally. This means that this rally may go further then most expect. Although the market is extended, I look for new highs in the S&P 500 index, upside target of 1,566 to 1,600, before much of a pull back. There could be some seasonal weakness from October 11 through the 26. Once October lows are in, I look for a rising market through year-end.

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Posted by Michael Chapman at 12:00 PM PDT