Over 100 years ago, Charles Dow wrote articles for Barron’s that formed the basis for much of the technical analysis toolkit used today. Dow’s work involved relating two key indexes- the Dow Industrials and the Dow Railroads- to determine the trajectory of the stock market and its implications for broader economic conditions.
In today’s video, we’ll discuss how traditional Dow Theory may be giving us an early warning sign about a potential stock market top and review the most important signals to watch in the coming weeks. We will also discuss the following:
– How Charles Dow’s early work on stock indexes still resonates in today’s market
– What Dow Theory told us in February 2020 and October 2020, and what a bearish non-confirmation could mean for stocks
– What the recent breakdown in the Dow Transports suggests in terms of overall market strength in the 1st quarter of 2021
For deeper dives into market awareness, investor psychology and routines, check out my YouTube channel!
One Chart: Dow Theory [VIDEO]
Twitter: @DKellerCMT
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
