When Does the Stock Market Break Down?
Stock-Markets / Stock Markets 2015 May 20, 2015 - 08:56 PM GMTThere are a lot of ol' timers out there who have their programs set for "not going against the DOW Theory". That means, if the Dow Transports and the Dow Industrials fail to the downside, sell programs will kick in.
The Dow Theory says that the Dow Jones Transports and Industrials must be in sync with each other. For that reason, we will look at the Dow Transportation Index today in order to see what it is doing.
The chart is below and when you look at it you can see that it has been in a trading range since last October.
Currently, the DJT is still inside its trading range and holding. It has been trying to consolidate but it is has been in the bottom half of the trading range.
Note the red resistance line since April 23rd. ... the DJT has been in a down trend since then and it needs to break above the red resistance line.
So, make a effort to keep an eye on the Dow Transportation Index.
By Marty Chenard
http://www.stocktiming.com/
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Marty Chenard is the Author and Teacher of two Seminar Courses on "Advanced Technical Analysis Investing", Mr. Chenard has been investing for over 30 years. In 2001 when the NASDAQ dropped 24.5%, his personal investment performance for the year was a gain of 57.428%. He is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools. As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL. He is an advanced technical analyst and not an investment advisor, nor a securities broker.
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