Of course, there was one other small detail about my post yesterday and these little "wrinkles" are what make Dow Theory so fascinating to me. The "non-confirmation" always sets up a possible "confirmation." Yesterday, in spite of the rare, cautious "double non-confirmation" the Dow was only about 33 points below a new high.
Today both the Dow and the Transports advanced to new highs - together. As I mentioned back in July there is no clearer sign under Dow Theory that the market will go higher in the near term. So, today was a booster rocket firing after the lift-off signal in July.
This market will most likely go higher. As always I'll stay tuned but the markets are traditionally considered "leading indicators" and - for now - the Dow and the Transports like whatever it is they are seeing ahead. Pushing through 9,600 now puts us in a position to be looking at 10,350ish - the mark of the 50% Principle I mentioned yesterday.
My other Dow Theory guy, Jack Schannep, continues to contend that the bear market is over. He wrote recently on his site that he thinks the Great Recession actually ended in June and the Dow could possibly hit 11,000 by November. Let's hope he's right.
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