Wednesday, April 30, 2014

Apr 23. Dow Theory Confirmation.

The concept of confirmation in the Dow Theory states that the primary trend is confirmed when both the industrial and transportation averages reach new secondary highs or lows together on a daily closing basis yet not necessarily at exactly the same time.
The Dow Jones Industrial ($INDU) and the Dow Jones Transportation ($TRAN) printed its new secondary highs in December 2013 and January 2014, respectively. Both averages experienced a decline in the beginning of 2014 only to start rising in February again. Since then the TRAN has made three consecutive new highs while the INDU has been struggling to overcome its December high. Today the INDU has closed at a new high thus confirming that the market primary uptrend is still intact.

2 comments:

  1. Thanks Igor. A couple other sites I read have come to the same conclusion. Hadn't seen the Dow Theory presented and was pleased to read it here. Hope things are well with you. Always look forward to your thoughts. Thanks :)

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    1. Thank you John, appreciate you stopping by regularly.

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