Dow Theory in Focus

by Ashraf Laidi
Dec 15, 2016 11:24

Is the Dow Transportation Index inability to close above its recent highs a red flag for Dow Theory followers? The theory holds that new highs (lows) in the Dow Industrials, or Transportation index, must be confirmed by new highs (lows) in the other. Failure to do so could imply that the highs (lows) attained in one index are unlikely to follow. 

Click To Enlarge
Click To Enlarge
Dow Theory in Focus - Dow Theory Dec 13 (Chart 1)

Although, the Dow Jones Transportation Index did end last week above its 2014 record high, its current decline below the latest highs (and 2014 highs) may raise doubts over the continuity of the advances in the Industrials. A possible reason for Wednesday's stock market selloff could be the disconnect between the Fed's higher than expected 3-rate hikes for 2017 and the modest upward revision in GDP to 2.1% from 2.0% in September. And with Yellen re-highlighting throughout her conference that inflation remains below the Fed' target, the question on whether the spike in yields is too unsustainable gains in validity.

 

More Hot-Charts

  • EURUSD vs Bond yield Spread

    May 1, 2025 12:34 | by Ashraf Laidi
    سأرسل رسالة صوتية و كتابية توضيحية لأعضاء مجموعة الواتساب الخاصة حول هذه المخططات - Will send a detailed note on the latest technical parameters to our WhatsApp Bdcst Group...
  • 30 mins pattern

    Apr 28, 2025 15:06 | by Ashraf Laidi
    سأرسل رسالة صوتية و كتابية توضيحية للمجموعة حول هذه المخططات - Will send a detailed note on the latest technical parameters to our WhatsApp Bdcst Group...
  • Gaps Update Chart

    Gaps Update

    Apr 25, 2025 14:50 | by Ashraf Laidi
    سأرسل رسالة صوتية و كتابية توضيحية للمجموعة حول هذه المخططات - Will send a detailed note on the latest technical parameters to our WhatsApp Bdcst Group - -...
Hot-Chart Archives
Comments (Showing latest 0 of 0) View All Comments