HEADLINES FROM YESTERDAY'S WALL STREET JOURNAL --"FACTORY SLUMP REACHES THE US -- Slowdown in Europe -- Asia slams American firms --Weak Euro Hurts Exporters."
Subscribers may be wondering whether the Dow theory bear market signal of early May was valid -- and if so, what did it mean? Since the bear market signal, the stock market has done a lot of aimless traveling, but nothing, so far, has negated the bear signal. However, we are now seeing signs of the return of the recession (as per yesterday's WSJ headlines as seen above.)
Study the daily chart of the Industrials below. Since the May 1 high, the Dow has slumped, rallied back above its two moving averages, -- and that's where it is today. If the Dow and the Transports had both bettered their May peaks, I'd be impressed, but that hasn't happened.
Next, let's check the Transport Average below. Here we see the Transports ... Log in or subscribe to continue reading.
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