Staring Into the Big Blue Abyss

I have been cautious on IBM for quite some time, as I believe the long-time market bellwether had been throwing cold water on the bull with its underperformance throughout mid-late 2013, and most of this year too.

Today’s sell-off exacerbates the long-term technical picture, as the stock appears to be confirming a major top on the mostly timeframe, below.

I expect a move down to $130 in the coming month, based on the sheer size of the topping pattern. As you might imagine, that does auger well for the Dow and likely other major averages. A move back above $200 negates the bearish thesis.

Long-time readers will recall how wildly bullish I was on the stock in the summer 2010.

However, Big Blue has been a Big Value Trap for a while now.

I suspect the trap door is shutting as we speak for a good while longer.

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