The Phaserl


Equity Markets Attempt To Stabilize With A Dow Theory Sell Signal Already Triggered

from KingWorldNews:

On the heels a big surge in Asian markets, today King World News is featuring a piece from one of the greats in the business discussing the attempt by the global markets to stabilize with the Dow Theory “sell signal” already triggered. Also included is a quick note from Art Cashin.

“Hey Jeff, on your report this morning, we are using the closing low on Monday 8/24/15 (15871.08) for the Dow, but the closing low of 8/25/15 for the Transports. Why do we not use the closing low of 8/25 on the Dow of 15666? Thanks.” — A concerned financial advisor emailing about Thursday’s Morning Tack (9/3/15)

As I read Brian’s email (above) I thought to myself, “How could you make such a big oops?” because, sure enough, he was right. The closing low for the D-J Industrial Average (INDU/16492.68) was indeed on August 25th, coincident with the lowest closing for the D-J Transportation Average (TRAN/8012.86). Alas, when you publish you make mistakes, but I cannot recall making such an obvious mistake. In retrospect, I must have been so freaked out by Monday’s Mauling (-588 points), where the Industrials actually made their “print low” of 15370.33, that I just assumed that session’s closing price was the lowest closing low for the senior index.

My Error And The Dow Theory Sell Signal

My mistake, and in this business when you make a mistake you say so and move on. So, for the record, both the Transports and the Industrials made their closing lows simultaneously on August 25th at 15666.44 and 7466.97, respectively. Obviously, this “reset” gives the Dow a few more hundred points of wiggle room. The important point, however, is that there was indeed a Dow Theory “sell signal,” at least by my method of interpreting Dow Theory. I do find it interesting that the S&P 500’s (SPX/1969.41) “bone crushing” decline of 2008 – 2009 found its nadir at the mark of the devil, namely 666, on March 6, 2009. Hopefully, the same was true for the Industrials on August 25, 2015 at, you guessed it, 15666.

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