DIA barely got its hair mussed Friday on news that Trump has been infected with Covid-19. Even so, the intraday high fell well shy of a midpoint resistance at 281.36 that bulls will need to demolish in order to clear a path to the 297.45 target. On balance, we ended the day with no significant bias either way. That would change dramatically, however, on any news over the weekend that the President’s condition had worsened. If that happens, expect DIA to gap down to at least p=270.87, or even to p2=266.13, with 261.39 as the worst case, short-term. Here’s the chart. If Mr. Trump is reported to be doing ‘great’ but there are no confirming television images of him smiling from his bed at Walter Reed Hospital, you can use tightly stopped call options to bottom-fish p=270.87 with a tight stop-loss, since that’s where DaBoyz are likely to stage their first rally attempt on inconclusive news. _______ UPDATE (Oct 5, 5:10 p.m. ET): Sunshine and lollipops poured down on Wall Street yet again as DIA hit 281.59 after gapping higher on the opening. Now, two consecutive closes above p=281.36 will all but clinch more upside to the 297.45 target noted above. _______ UPDATE (Oct 8, 8:02 p.m.): DIA has done what we asked of it, but not with sufficient brio to imply that a blast to 297.45 is a done deal. To be cautious, we’ll use p2=289.41 (see inset) as a minimum upside projection for now.
DIA – Dow Industrials ETF (Last:284.28)
