Dow Theory

This one came up from GlobalStation.com.br.

Among other things, the Dow Theory says that the movements on one of the averages (industrial) must be confirmed by the movements on the other average (transportation). In January/04, the transportation average started to diverge negatively in comparison to the industrial average.

Later that was confirmed as an alert signal and both the averages fell to their support: the transportation average touched the 200 MA and the industrial average stopped falling at its 38% Fibonacci retracement considering the bullish move from August/03 to February/04.

If these support levels are maintained, rallies can happen on the next few weeks.

This one came up from the folks at GlobalStation.com.br.

^DJI 10,300.30 on 3/17/2004

^DJT 2,847.65 on 3/17/2004