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Marvin S
02-28-2012, 03:50 PM
Finished @ 13,005.12 today. Does that have any significance to you? Does the Dow have any significance to you?

menmon
02-28-2012, 03:59 PM
Finished @ 13,005.12 today. Does that have any significance to you? Does the Dow have any significance to you?

We will start with dog 12 this weekend:cool:

M&K's Retrievers
02-28-2012, 04:00 PM
Not any more. :(

menmon
02-28-2012, 04:03 PM
Not any more. :(

Why not? Did they change the rules?

Franco
02-28-2012, 04:08 PM
We will start with dog 12 this weekend:cool:

Too funny!:D

Also, looks like a good time to go short;-)

M&K's Retrievers
02-28-2012, 05:10 PM
Why not? Did they change the rules?

Not that I know of. I was referring to Marvin's OP.

Mike W.
02-28-2012, 05:56 PM
All I know is I'm dog #16.

menmon
02-29-2012, 09:43 AM
All I know is I'm dog #16.

That sucks

menmon
02-29-2012, 09:45 AM
Too funny!:D

Also, looks like a good time to go short;-)

I would not short this market...I'd be a buyer

Uncle Bill
02-29-2012, 03:07 PM
Just for you, Marvin...

UB


BOOM & BUST>> 02.27.12

A Look at the Dow(s)…
Dow 13,000…
Dow 5,200…




Dear William,


• Last week you got our note about “Dow 13,000 (http://clicks.boomandbustinvestor.com//t/AQ/AAmieg/AAmzxg/AAYAGg/AQ/AnzL8g/IlOz).” In it we explained that unprecedented amounts of stimulus got us there, leaving no room for celebration. Stimulus is temporary buoyancy… hot air. But there’s another reason we don’t see “Dow 13,000” ushering in the next prosperous bull market yet. And it has nothing to do with stimulus. In fact, this reason was born even before Keynesian economics...

• We asked Adam, who eats, sleeps and breathes technical analysis, to pull the oldest books from his collection to explain how a fundamental theory of the stock market, developed in the late 1800s, still applies to today’s market. Here’s his interpretation of what the Dow Theory says about “Dow 13,000…”

• In the late 1800s, Charles Dow established the Dow Jones Industrial Average (DJIA) and the Dow Jones Transport Average (DJTA) to measure the strength of companies that produced goods (DJIA) and companies that transported goods (DJTA). Taken together, they were a gauge of the economy’s strength or weakness.

• One of the basic tenets of Dow Theory is confirmation. Charles observed that when both the Industrial Average and Transport Average are making new highs, the stock market is healthy… that’s confirmation of a bull market. The observation has a rationale that’s easy to understand: Produced goods must also be transported.

• But when the two averages diverge – say, the Industrial Average makes new highs while the Transport Average doesn’t – something is wrong with the economy. This divergence signals weakness that reveals a pending shift in momentum. Look at the charts below…

Dow Jones Industrial Average Breaks Above May 2011 Highs


http://boomandbustinvestor.com/files/2012/02/0227_bnb1.gif
Dow Jones Transport Average Well Below July 2011 Highs


http://boomandbustinvestor.com/files/2012/02/0227_bnb2.gif



• As you can see, while the Dow Industrial Average is making new highs (near 13,000), the Transport Average is not (trading near 5,200). If Charles was alive today, his conclusion would be simple: New highs in the Industrial Average – simply “the Dow” today – are not meaningful, as the Transport Average doesn’t confirm it.

• Charles passed away in 1902 so he had no way of knowing the amount of stimulus we’d use to push the Dow to new heights. Our guess is he’d be appalled. Regardless, his conclusion would be the same. If market indices are not moving in the same direction… change is in the air.

• One final chart to ponder… showing how high oil prices cripple the economy. Oil prices have been rising in February (USO, an oil ETF, is up 8.5%). At the same time, the Dow Jones Transport Average has been falling (DJTA is down 4%). A healthy and growing economy needs “affordable oil.” Expensive oil chokes off the economy. It hits transportation companies hardest, and early, but the ripple effect extends to the whole market. As we enter the season that’s typically bullish for oil, we’re keeping a close eye on how higher oil prices affect consumer spending, economic recovery and the equity markets.


http://boomandbustinvestor.com/files/2012/02/0227_bnb3.gif

• Starting tomorrow, we’re going to be communicating with you more often so you know what’s going on in the markets, what to do about it and when to do it. Every Tuesday, Wednesday and Thursday, watch your inbox for our new Survive & Prosper e-letter. This new benefit to your membership will give you more insights from all three of us, plus links to further reading on events that impact your investments and solutions you can implement to survive and prosper. We look forward to talking to you again tomorrow.

Until next week,
http://boomandbustinvestor.com/files/2011/08/Harry-Rodney.gif
Harry & Rodney