The Dow Jones Industrial Average
A drop of 767 points in afternoon trade on Friday to fall below its lowest close since June 17 (29,888.78) not only showed that the bear market was alive and kicking, but also triggered a sell signal on basis of age-old Dow theory of market analysis. The Dow’s new low combined with a streak of lower January closing highs for the Dow. 4 record close of 36,799.65, confirms The Dow Theory definition of a downtrend, a continuing pattern of lower highs and lower lows. And since the Dow Jones Transportation Average
already closed on September 16 below its June closing low, the Dow Industrials’ new low completes a “sell” signal. And as MarketWatch contributor and founder of Hulbert Ratings LLC wrote, the Dow Theory, despite its age, has been beating the broader stock market for a long time.