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Richard's Remarks


Below is a picture of a frantic Dow. We see many reversals as investors try to climb aboard and create some urgently needed quick profits.




Transports following suit. Lately the companion averages have been moving in sync. But there's more to Dow Theory than just the price action. There's also the critical matter of values.




For instance, the dividend yield on the Dow is now 2.22%. The dividend yield on the S&P 500 is 2.11%. In both cases this is below the yield on the benchmark 10-year Treasury. So why are investors buying the two leading stock averages when they are so expensive? They are buying them because it's the only game in town. Note the steady low volume in the Dow. Only the trigger-happy hedge fund gunmen have the nerve to play this game. My instinct is to stay out of this market roulette madness.


Much of the heated action is based on ... Log in or subscribe to continue reading.

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