A DOW THEORY SELL SIGNAL, SORT OF
As mentioned at the time, last week’s Dow Theory sell signal was open to interpretation, and wouldn’t necessarily be embraced by all. Therefore, I probably should have included those last couple of words (sort of) in my previous weekly column. A number of people have since pointed out that the new lows set by both Averages did not satisfy all of the requirements for Dow Theory sell signal. This is because prior to the Industrials and Transports dropping below their early-August correction lows, both Averages had made new highs. Technically, then, our current correction cannot signal the end of the Bull market and beginning of a Bear market according to Charles Dow’s theory, many say.
I see things differently, for a number of reasons merely hinted at last week. Let me explain further. Time and time again, the great modern Dow Theorists (Rhea, Shaefer, Russell) ... Log in or subscribe to continue reading.