Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
YouGov's MRP Poll Final Tory Seats Forecast Revised Down From 359 to 338, Possibly Lower? - 10th Dec 19
What UK Economy (Average Earnings) Predicts for General Election Results 2019 - 10th Dec 19
Labour vs Tory Manifesto's UK General Election Parliamentary Seats Forecast 2019 - 10th Dec 19
Lumber is about to rally and how to play it with this ETF - 10th Dec 19
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Wealthbuilder Quarterly Stock Market Brief and Stock Pick

Stock-Markets / Dow Theory Sep 22, 2009 - 01:54 PM GMT

By: Christopher_Quigley

Stock-Markets

Best Financial Markets Analysis ArticleThe monthly charts of the Dow Industrials and the Dow Transports are most revealing as they allow one immediately get a long term perspective on the current market situation. The Dow 30 hit an intraday high in October of 2007 touching 14,198. The Dow 20 got there in May 2008 hitting 5,536.


The current  Dow Industrial and Transport "highs" can thus rise by a further 45% and 40% respectively before the matter of a new "Bull" economy can really be decided upon ( based on classic Dow Theory that is). Yes we are definitely in a "bull" trend but we are most certainly not in a bull market. For a new bull market to be in place the indices must reach higher highs and higher lows, off the 2007 and 2008 highs, and both movements must confirm.

Dow Jones 30 Industrial Index: One Month Chart 2002 - 2009

Dow Jones 20 Transport Index: One Month Chart 2002 - 2009

Now "the trend is your friend" and must be traded on by active market participants. For me a tradeable trend is one where both Dow indices give me higher highs and higher lows, on three day charts. Such a trend commenced in March of this year. So far this trend has not failed. It was tested by the Dow 30 but was not confirmed by the transports. The trend thus stayed in place and you remain invested until both averages confirm otherwise. They are the rules and I use them.  However, such a trend should not be invested in "on a buy and hold regardless basis". Nobody can have fundamental confidence in this market. The theory thus indicates we have a trending, capital gain making, opportunity but not a safe, income generating, economic boom.

Momentum alone does not remake a shattered economic structure. Sooner or later the rubber has to hit the road. When it does, the smart money will know what technical trigger to use to short in unison on the downside. They will be ready. You should  be alert . A perfect position for such a test would be the previous all-time highs. Inability to break this psychological barrier would be serious. Look to the Transports first for an early indication. Currently we are in no-mans land. There is plenty of technical up-side and substantial fundamental down-side and earnings season is upon us. Therefore "all is well", provided the trend holds. It's as simple as that. Any other thinking will cause you paralysis by analysis.

Short to mid-term, any forceful downside movement could be sharp and will put some manners on unbridled optimism. Therefore trade with hard technical sell-stops should you enter on weakness or desire to protect up-trending profits. The severity of any ensuing technical damage will dictate how long the market will take to lick its wounds and consolidate. The longer this latter phase lasts the better in my opinion as it will allow the real economy an opportunity to regroup and rebuild and rematrix.  Ideally a substantially lower dollar (in effect a phased  re-valuation of the currency) would be a great boost to America for it would promote inward investment in real estate and other capital assets by foreign entities. Such inward investment is sadly needed.

 However, with the indices so far off their former highs of 2007 and 2008, we could be waiting a little longer for any significant correction. The Over The Counter (OTC) "masters" on Wall Street, the Contract For Difference (CFD) "spartans" in  London, the spread-betting (SB) "ninjas" in Hong Kong and the Exchange Traded Fund (ETF) "gurus" in New Jersey  may decide to hold off on their delivery of a hyper leveraged reality check. They may thus continue to let us believe a little longer there are no such things as joblessness, under-employment, economic velocity collapse, mall malaise, derivative dysfunction, American production obsolescence, wage-rate shrinkage, and private and corporate credit disintegration. Life must go on for sure but will consistent compounded EARNING, that is the sixty four hundred billion dollar question that has remained unanswered since 18th. January 2000.

Stock Pick

NTELOS Holdings
Ticker:  NTLS

Ntelos is an integrated communications provider, offering wireless and wireline services to consumers and businesses in 7 Mid-Atlantic States.

On the heels of a solid top and bottom-line advance in 2008 this Telco is taking brilliant advantage of solid subscriber growth. New product offerings and network upgrades planned for the year ahead ought to help boost market share and retain subscribers.

Fundamentals:
Div Yield:                         6%
P/E:                                  11.2
Ret. On Shr. Equity:      29%     
Fin. Strength:                 B

By Christopher M. Quigley
B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley is 46 years of age and holds a Batchelor Degree in Management from Trinity College/College of Commerce, Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the Stock Market in San Francisco, California where he lived for 6 years. Now based in Dublin, Mr. Quigley actively trades utilising the principles set out in the modules above. This Wealthbuilder course has been developed over the last 9 years as a result of research, study, experience and successful application.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Christopher M. Quigley Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules