Comments on: Dow Theory Nonconfirmation in Transports and Industrials

By: trading

trading — Tue, 16 Jun 2009 00:05:15 +0000

But didn't it happen just before the recession that dow theory was yelling to buy and everybody was buying and not just buying but buying stocks madly. In the end recession came and many people got burnt. It's good to follow theories but at the same time you need to concentrate on other issues.

By: trading

trading — Mon, 15 Jun 2009 19:05:15 +0000

By: The Pullback Flag Retracement in Google GOOG | Penny Stock Trading System Blog

Sun, 14 Jun 2009 21:52:02 +0000

[...] at the caveats. The overall stock market is overextended and I just recently highlighted a “Dow Theory” Sell Signal (or non-confirmation) so now might not be the time to get aggressively [...]

By: Bob

Bob — Sun, 14 Jun 2009 19:10:52 +0000

Excellent point about the long term down trend. Price would have to break above 9000+, and since it hasn't, we are technically, still a bear market.

The current price is quickly approaching the intersection of the downward sloping longer term trend line and the upward sloping shorter term trend line of this rally. Both appear to be holding and valid. Also, price has yet to pierce the SMA's.

By: Abe Froman

Abe Froman — Sat, 13 Jun 2009 22:07:48 +0000

Corey, first time poster here. I have really enjoyed reading your posts since I found your site about a month ago. Thanks for helping us understand some of what we see in the markets as we strive to make infomed trading/investing decisions.

By: Bob

Bob — Sat, 13 Jun 2009 21:25:26 +0000

Gravity is a powerful force… I think we are close, but it's hard to time it. Patience… Wait for it!

By: Corey Rosenbloom, CMT

Corey Rosenbloom, CMT — Sat, 13 Jun 2009 19:49:13 +0000

Well, you're right and I read Zero Hedge's article and if that is the case indeed, what are we to do? I mean, the obvious answer is to get aggressively long as the market is cooked up but that goes against everything we believe in as traders and technicians and more.

Reality is that supply & demand move markets, not fancy charts or fundamentals. If the government is indeed doing something, it would push on the demand side thus driving prices higher no matter what the charts are showing in terms of volume, momentum, or breadth divergences.

Price is king – just that we trust the price we see is a fair price.

By: Corey Rosenbloom, CMT

Corey Rosenbloom, CMT — Sat, 13 Jun 2009 19:46:18 +0000

Right – for now, the higher timeframe Trend is down (see weekly charts). We've not broken to an uptrend there. We'd need to see a meaningful close above 9,000 to get excited.

We might get the exhaustion rally as you mentioned which would confound even more traders by thinking “well, it's certain now we're in a new bull market” just as this swing peaks out.

Will this swing ever peak out?

By: Corey Rosenbloom, CMT

Corey Rosenbloom, CMT — Sat, 13 Jun 2009 19:44:23 +0000

Haha – that's why I wasn't going to type in bold letters “BIG SELL SIGNAL” because this market has confounded both the technicinans and fundamental analysts all the way up.

Sentiment is strange – the newer, inexperienced people seem to be excited and bullish but most every pro I talk to is doubtful/bearish. Not so much looking for a collapse, but at least a meaningful retracement of this large move up.

By: JeffreyLin

JeffreyLin — Sat, 13 Jun 2009 19:25:59 +0000

from a chart standpoint this is obviously a non-confirmation. but many “new” Dow-Theorists say tech $QQQQ's should be used isntead of transports nowadays. also, this market has faked a lot of basic TA analysis (http://finz.tv/2009/06/06/qman-alamo-trader-cha...) and gone the other way, with psychology seeming a much bigger part. What says you Mr. Psych Major?!?!!!