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The Dow Theory Points to an Approaching Bear Market

The Dow Theory Points to an Approaching Bear Market

Posted On December 17, 2018 2:09 pm
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As investors try to suss out whether we are entering a longer-term bull market, one of the tea leave indicators they’re turning to is the Dow Theory.

Dow Theory revolve around the Dow Jones Industrial Average (DJIA) and Dow Jones Transportation Average either confirming or not confirming each other’s trends.

That is if one of its averages (industrial or transportation) advances above a previous important high and is accompanied or followed by a similar advance in the other average.


For example, if the Dow Jones Industrial Average (DJIA) climbs to an intermediate high, the Dow Jones Transportation Average (DJTA) is expected to follow suit within a reasonable period of time.


As you can see, the transports started rolling over in early September before the broader market peaked.   It also has now been…

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About author

Steve Smith
Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.

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