Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Postive Divergence a NON-Confirmation of Secular Stocks Bear Market

Stock-Markets / Dow Theory Apr 09, 2009 - 03:01 AM GMT

By: Submissions

Stock-Markets Best Financial Markets Analysis ArticleSteven Vincent writes: The DJTA did not confirm the DJIA move below 2002 lows.Much has been written about the Dow Theory confirmation of a continuation of a perceived Secular Bear Market. When the Dow Transports Index violated its November '08 lows it is held to have confirmed the INDU's move to new bear market low and thus validated the hypothesis that the markets had entered a Secular Bear Market and that the existing downtrend would continue.


Bears have had that analysis called into question as both indices have regained their November '08 low and more.

I believe this apparent signal failure can be explained by examining a longer term NON-confirmation between the INDU and the DJTA. Simply, the Dow made a marginally lower low in comparison to its 2003 bear market low and the Transports did not. It would seem that the longer term bullish non-confirmation has trumped the shorter term bearish confirmation. It's also worth noting that both indices bested their prior highs subsequent to the 2003 bear market bottom yet that bullish confirmation did not establish a sustainable bull trend.

Dow Theory analysts contend that the longer term time frame does not negate the near term Dow Theory signal. Nonetheless. this is a Positive Divergence and a NON-Confirmation of a Secular Bear Market placing the recent move in the category of a Financial Panic similar to the Panic of 1907. We technically remain in a Secular Bull Market (although just barely) and the next bull move (underway) would be either part of an ongoing Secular Bull Market distribution top of Grand Super Cycle proportions OR the end of the Cyclical Bear Market that began in 2000 and the resumption of the Secular Bull Market. It’s also worth noting that similarly, the Nasdaq did not confirm the breakdown below the 2003 lows.

Please see the charts:

 

Click to Enlarge

My current market stance is bullish until SPX 1000 or its 200 DMA on the upside OR SPX 790 on the downside, whichever comes first.

You can follow my charts and semi-daily updates here: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3279450

Steven Vincent
“End the Fed! Sound Money for America”

© 2009 Copyright Steven Vincent - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in