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Thread: Dow Theory

  1. #49

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    Default Re: Dow Theory

    Mick, the whole point of this thread is to capture the big picture within the micromanaged minute to minute "news feeds" that we as Americans have become slaves to. Dow Theory, though subject to debate, is one such way to filter out the vast amount of interference and noise in the day to day investing environment.

    Bottom line: Dow Theory has said this is a bull market for months now.

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  3. #50

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    Default Re: Dow Theory

    While the world focuses on Tiger Woods, and other absolutely moot political topics, the market continues marching on without them. Let there be no doubt- this uptrend is still intact.

    Attachment 7634

    Attachment 7635

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  5. #51

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    Default Re: Dow Theory

    Uptrend is still intact indeed, but Transports look to be struggling here and Industrials still defy gravity. I see a big move up or a good correction down any day now based off internals and simple MACD. A big move up would, in my opinion, be the blow off top all bulls seem fearful of missing while a correction would most likely be the final buying opportunity before this cycle peaks. Either way, I hate to say it, the 'waiting for a dip to buy' folks won't buy and the 'waiting for a blow off top to sell' crowd won't sell. Let's be honest here.

    I can see this market being propped up a bit longer with new money coming in for Roth IRA contributions and the tax refund season. However, there has been major distribution in this market over the past 2-4 weeks. If you're playing around for that maniacal, upward blowoff top that investment fantasies are made of, just be sure to hit the sell button before getting too caught up in it if it does arrive. Unfortunately, most blow off tops are recognizable in hindsight only since the news will support the move in it's entirety.

    As far as Dow Theory is concerned, my words are mere speculation on my part. Dow Theory remains in an uptrend, and pullbacks should be bought until a trend change takes effect.

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  7. #52

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    Default Re: Dow Theory

    Quote Originally Posted by Bullitt View Post
    Uptrend is still intact indeed, but Transports look to be struggling here and Industrials still defy gravity. I see a big move up or a good correction down any day now based off internals and simple MACD. A big move up would, in my opinion, be the blow off top all bulls seem fearful of missing while a correction would most likely be the final buying opportunity before this cycle peaks. Either way, I hate to say it, the 'waiting for a dip to buy' folks won't buy and the 'waiting for a blow off top to sell' crowd won't sell. Let's be honest here.

    I can see this market being propped up a bit longer with new money coming in for Roth IRA contributions and the tax refund season. However, there has been major distribution in this market over the past 2-4 weeks. If you're playing around for that maniacal, upward blowoff top that investment fantasies are made of, just be sure to hit the sell button before getting too caught up in it if it does arrive. Unfortunately, most blow off tops are recognizable in hindsight only since the news will support the move in it's entirety.

    As far as Dow Theory is concerned, my words are mere speculation on my part. Dow Theory remains in an uptrend, and pullbacks should be bought until a trend change takes effect.

    Good post Bullitt it sums up the reality of this market. My vote still resides with a correction after earnings are over. Perhaps another March bottom?

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  9. #53

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    Default Re: Dow Theory

    Market warnings have been abound for at least two weeks now and finally the internals are catching up to the Indexes. Dow Theory doesn't care about moving averages but I kept the 50DMA in there for two reasons. 1. Dip buyers just got hammered today and 2. If you're a bull, you can't be happy about the way the Transports cut thru the 50DMA like a knife slicing warm butter.

    Take heed to the bearish divergence!

    Attachment 8041

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  11. #54

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    Default Re: Dow Theory

    Yep, let there be no doubt, the uptrend relentlessly charges higher as more and more bulls climb 'over the top' when they hear the Monday market whistle.

    Another buy signal was generated the week of April 12-16. Not a buying opportunity signal, but a confirmation of the trend nonetheless.


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  13. #55

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    Default Re: Dow Theory

    It's been a while.

    Like I've said before, there are many interpretations of Dow Theory with the only one right being the one we call in hindsight. Right now, I'm calling the July lows in DJIA and TRAN as the line to watch.

    DT doesn't care about technical analysis but it seems to give warnings prior to DT signals when done with basic indicators. I can't help but to notice a few things.

    1. Big H&S pattern in both DJIA and TRAN from Dec2009 until now.
    2. Smaller H&S pattern in both from June 2010 until now.
    3. Looks like the right shoulder in the smaller H&S patterns are rolling over. Selling pressure at 200DMA line.

    However, DT works best when one does not front run signals. When we get closer to the signal, I expect media attention like that of the Hindenburg Omen.

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  15. #56

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    Default Re: Dow Theory

    Dow Theory Update
    By Tim W Wood CPA09/21/2011


    http://www.financialsense.com/contri...-theory-update

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  17. #57

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    Default Dow Theory

    Transports never did make new high as they should have to confirm the uptrend in Industrials. With the market in a correction, a signal change to sell could occur in Dow Theory. Looking at the oscillators and weekly charts, stocks have a few weeks before any indicator can trigger an oversold strong buy. A resolution either way is not happening any time soon, so until then we're just treading along somewhere in the middle. Must be Summer.

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  19. #58

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    Default Re: Dow Theory

    As was the case with the 1968 and 1973 high, and every other major top since 1896, once the DNA Markers setup, this rally will be capped and the secular bear market will resume. In the meantime, this rally continues to convince the masses that all is well and in the process a much much larger trap is being set.
    Dow Theory Buy? | Tim Wood | Safehaven.com

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  21. #59

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    Default Re: Dow Theory

    Dow Theory sell signal happened on Thursday, 8/20.

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