by Jon S. Strebler
One of the things we consider when assessing the technical (chart) status of a given market is confirmations from related markets. An obvious example for Dow Theory Letters would be to see if the Transportation Average confirms key new highs (or new lows) in the Industrial Average. Lately we’ve been troubled by the fact that strength in the Industrials has been juxtaposed with a Transportation index on the verge of breaking below key support. Non-confirmations of this sort call into question the validity of the overall market’s strength. And yet we recall that such non-confirmations have been rather common in this long bull market, and have always (so far) been resolved by both Averages getting in gear on the upside.
A related concern has come from world stock markets failing to confirm new highs made by US stock indices. How long can the American economy, corporate profits, and ... Log in or subscribe to continue reading.