Wednesday, August 26, 2009

Dow Theory: Non-confirmation of rally?

Brett Steenbarger discussed a bearish non-confirmation for the new high in the S&P (SPY) with respect to emerging markets (EEM).

Another tick in the nervous bull column is the non-confirmation between the transports (IYT) and the Dow (DIA).

Volume patterns between the transports and the Dow are also different; the Dow (DIA) has shown respectable volume on its new high, while the transports (IYT) have traded insipid volume since breaking $65 at the start of August.

Buyer beware.

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Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts, stock charts, stock screener and stock portfolio manager website

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