4/19/2016 – A mixed day with the Dow Jones up 50 points (+0.28%) and the Nasdaq down 20 points (-0.40%)
Who cares about earnings??? The stock market certainly doesn’t, at least not at this juncture. With the Dow Jones just 250 points shy of its May 2015 high, most bulls are already celebrating the new highs. Well, maybe they shouldn’t..
There quite a few divergences in this market. With one of them being attributed to a now well tested “Dow Theory”. In essence, the Dow Transports are not confirming today’s market rally. Just take a look at the chart below (and above).
While the Dow has retraced most of its down move, the Dow Transports have recovered just a little over 50%. That is not a good sign as the transports typically take a leadership positions in a full blown bull market.
Instead, the said divergence points to a different conclusion. That is, what we are witnessing on the Dow is a bounce. A bounce that might fail in the very near future. Which interpretation is the correct one? The Dow Theory points to the latter, but only time will yield the right answer.
Finally, it is not only the Dow Transports. The NYSE (largest index by capitalization), Biotech Index (IBB), low volume and multiple other divergences are not buying this rally. Invest accordingly.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. April 19th, 2016 InvestWithAlex.com
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