Dow Theory Test coming

The Transports have made a new high above the Jan high. Industrials have not yet bettered the 10,725 Jan high. A non confirmation often signals a reversal of trend. A reversal that takes out the Feb lows by both averages would be bearish. A corollary the the Dow theory is that each succeeding confirmation by both averages carries less weight or validity than the last. If there were a confirmation, and the news media heralded it, it too may be a bull trap.

I don't know much, but I think it is when the industrials make a new high vs not the transports, not the other way around. If anything, the cargo is on the way and the deliveries will be made where the industrials will follow... Just my 2 cents.

I don't know much, but I think it is when the industrials make a new high vs not the transports, not the other way around. If anything, the cargo is on the way and the deliveries will be made where the industrials will follow... Just my 2 cents.

Your interpretation makes sense...that a non confirmation by the Transports carries more weight and validity than if the non confirmations was by the Industrials failing to make a new high.

On the subject of non confirmations, though, I don't recall reading the importance of one or the other in failing to make a new high...from readings of Chas. Dow, William Peter Hamilton, editors of the WSJ and Robert Rhea, a later expounder of Dow Theory. But inferences did suggest the importance of 'rail car loadings', etc.

In any case, now, if there is a confirmation, it would be of the cyclical bull market in force from the Mar 09 Lows. The secular bear market is still in force from the all time highs.

Tom, you are correct . . . keep an eye on that in the near term.
Either the DOW confirming with an Up move past 10,725 ...
or the Transports coming back Down below their highs and staying there.
Good Luck !!

The Transports have made a new high above the Jan high. Industrials have not yet bettered the 10,725 Jan high. A non confirmation often signals a reversal of trend. A reversal that takes out the Feb lows by both averages would be bearish.

A corollary the the Dow theory is that each succeeding confirmation by both averages carries less weight or validity than the last.

If there were a confirmation, and the news media heralded it, it too may be a bull trap.