Uncertainty and mystery are energies of life. Don’t let them scare you unduly, for they keep boredom at bay and spark creativity. R. I. Fitzhenry
In September we penned a second article in the Alternative Dow theory series, titled ‘Dow theory no longer relevant-Better Alternative exists where we stated that the Dow theory as it stood was no longer relevant. Here is a brief excerpt from that article.
The transports topped out in November of 2014, and according to the Dow theory this is a big negative; the Dow industrials should have followed suit. Instead, the Dow soared higher paying no heed to this theory proving to a large degree that this theory has lost its value. After all, it is a theory and the definition of a theory is ‘a supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained.’
That is why way back in 2006 we offered a Dow theory Alternative that has proved to be far more accurate and reliable than the Dow theory. Just to let this sink in, the transports topped out almost two years ago and instead of trending lower the markets have surged to new highs. If you look at the above chart, the Transports appear to be finally gathering momentum and to break out. In the Dow theory alternative, we stated it was the Utilities that lead the way as opposed to the Dow transports, well let’s see if that holds true.
This post was published at GoldSeek on Friday, 16 December 2016.
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