Dow Theory

Re: Dow Theory

Postby winston » Sat Aug 26, 2017 6:29 am

Art Cashin of UBS, highlighted another sign of caution, via SentimenTrader:

"The Dow indexes are out of gear. The Dow Transportation Average continues to badly lag its brother index, the Dow Industrial Average.

The Transports are not only below their 200-day average, they just dropped to a fresh multi-month low.

Yet the Industrials are more than 5% above their own 200-day average, a divergence which has tended to resolve to the downside for both indexes, especially in the shorter term."

Source" Business Insider
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Re: Dow Theory

Postby winston » Sat Aug 26, 2017 6:44 pm

Transportation

by Charles Payne

Transportation needs to be part of the leadership in any rally in order for it to have credibility. Right now, these names are in trouble, especially the airlines.

The Dow Jones Transportation Index is unchanged on the year after hitting an all-time high of 9,742 on July 14. Now, it needs to hold 8,783 on the downside.

Potential airfare wars are hurting the airline industry, which is already under pressure from terror attacks in Spain and news that Warren Buffet sold his positions in Delta Air Lines (DAL), American Airlines (AAL) and United Continental (UAL).

I’m an old school Charles Dow fan and an investor who likes to see confirmation of a growing economy via transportation. Therefore, I need to see these names make a stand real soon.

Source: Investor Place
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Re: Dow Theory

Postby winston » Sun Aug 27, 2017 8:13 pm

Transports

Transports are a solid economic indicator. As cargo and freight are moving across the country and landing in ports, it is a sign that economic activity is chugging along.

Freight shipments starting to slow and eventually declining quarter over quarter has portended economic recession in the past.

As you can see in the chart below, there was a sharp drop-off in 2000 which preceded the dot com bust, and though it’s a bit tough to notice, there were two years of declines starting in 2006 that eventually saw a plummet in 2008.

Source: Federal Reserve Bank of St. Louis

It’s easy to notice that Transports are currently rising along steadily today, which is a good sign.

The U.S. Department of Transportation’s Bureau of Transportation Statistics’ [BTS] has shown that all but one of the major freight modes grew since the recession that ended in June 2009 with rail intermodal growing the fastest, rising 50.6 percent from June 2009 [the end of the economic recession] to December 2016.

Though transports are looking good now, it is important to keep checking back-in frequently.

Source: Zack's Research
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Re: Dow Theory

Postby winston » Fri Sep 29, 2017 6:56 pm

September saw this rare — and bullish — trifecta

By Mark Hulbert

All three major Dow averages hit new all-time highs in September

For the first time in over three years, each of the three major Dow stock market averages has just hit a new all-time high — the Dow Jones Industrial Average DJIA, Dow Jones Transportation Average DJT and Dow Jones Utility Average DJU. This development is rare: It’s happened in fewer than 4% of the months since 1970.

But here’s the even better news: Never have any of these prior events occurred at a bull market top. The least bullish of any prior occurrences (which came in the spring of 2007) still came five months before a top.

But the late Richard Russell, who for decades edited the Dow Theory Letters advisory service, considered joint highs among all three Dow averages as a sort of “Super Dow Theory” bullish signal.

The bottom line? Insofar as the future is like the past, therefore, the bull market should remain alive at least until near the end of the first quarter of 2018.

Perhaps the best we can say is one of Russell’s comments in the spring of 2007: “When all three DJ averages surge simultaneously to new all-time highs, it’s ridiculous to fight the trend.”



Source: Market Watch

http://www.marketwatch.com/story/septem ... yptr=yahoo
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Re: Dow Theory

Postby winston » Wed Jan 24, 2018 9:04 am

What this 118-year-old indicator says about today’s market

When the Transports are strong, it’s a good sign for the economy.

As you can see, both the Transports and the general market were higher one year later every time. And the Transports were at least 7% higher one year after these start-of-year streaks.

The performance in this leading indicator suggests the bull market in stocks is still intact – and should continue throughout the year.


Source: Daily Crux

http://thecrux.com/dow-theory-tells-us- ... pens-next/
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Re: Dow Theory

Postby winston » Thu Apr 07, 2022 10:29 am

Another Recession Indicator Just Flashed Red

By Al Root

The Dow Transportation Average (ticker: DJT) is a list of about 20 airlines, railroads and trucking stocks that some traders use to gauge the health of the overall economy.


Source: Barron's

https://www.barrons.com/articles/recess ... eid=yhoof2
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