Who says Dow Theory is out of date?
The important non-confirmation between Dow Jones Industrial Average (DJIA) and Dow Jones Transport Average (DJTA) is causing a major sell off in both averages.
My last blog stated that the market may turn bullish when DJIA breaks above the most recent high of 10537 in order to confirm the strength of DJTA. Unfortunately, DJIA never stood above that level, while DJTA broke through another previous high, resulting in double non-confirmation. In time, the imbalance will force the market to correct itself, and it is in the process of doing so.
DJIA is down 260 pt since last blog.
DJTA is down 22 pt since last blog.
Following the Dow Theory major trend, a cursory read of the charts indicates DJIA may fall below previous low of 9906 before regaining a noticeable upward traction.
If that indeed does play out, I can say “Dow Theory is alive and kicking major ASS!”
posted by jason @ 2:50 AM
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