Dow Theory Non-Confirmation Continues

The Dow Industrials continue to not confirm the upside in the Transports so the market rally remains unconfirmed for a Dow Theory perspective. At the end of last year note how each high in the Dow is confirmed by the trannies and visa versa. The joy ended on the last day of 2013. To begin this year, the Transports continue higher fueled by airline stocks and buoyant railroads. The double purple circle shows the trannies printing another new high but the Dow ran out of gas unable to confirm. Equity markets sold off creating the February bottom. The Transports were printing new highs again in March and this month. The Dow recovers as well and teased a new high in early April, actually printing a new intraday all-time high so the Dow Theorists threw confetti and began blessing the market. This only lasted a few minutes, however, since price collapsed that day and the Dow continues to non-confirm.

Trannies got whacked yesterday -1.6% now a couple hundred points off the recent highs. Market bulls need the Dow to start printing new all-time closing highs above 16.6K to keep the rally party going. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.