A relatively positive July employment number pushed the Dow Jones futures into hyper drive following an impressive month-long run that took the index past 9,000. Some analysts see the Dow going higher, though market technicians like Garrett Jones see a major top. Jones warned that equity markets may be near a historic top in early August and also mid-September. He expects an accelerated downturn in equity markets in mid-September. Larry Levin, president of Secrets of Traders, on the other hand, says the Dow could get to 10,000 in September. He says government stimulus programs have helped push the Dow higher despite bad economic news. “[Government intervention] is not going to stop. Programs like Cash for Clunkers and the bailouts have enabled these markets to continue to move higher [despite a poor economy],” he says.
Richard Roscelli, a broker for Whitehall Investment Management, says the market is overbought. “We’ve got a lot of follow-through from the S&P. The Dow’s been following the S&P. Of the three major indexes, it’s the one that’s been lagging the most.” He expects a pullback and range-trading in the Dow. “We’ll retest the 9,000 level. I don’t foresee a lot of movement,” he says. “The market is trying to get back to some sense of normalcy, so by the late part of August there should be a sell-off. It’ll be choppy and volatile. There might be some weakness going into October and then we’ll try for a late October-early November rise to 9,600-9,700,” Roscelli says.