Tuesday, June 23, 2020

#Dow Industrials Review $DIA

Dow Ind Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to long-term trends, it does not define them. The focus on short-term noise rather than trends, a source of confusion for the majority of investors, leads to the creation of bagholders at major trend transitions.

The Dow Industrials' overall trend, revealed by trends of price, leverage, and time, are defined in the The Matrix for subscribers.

Subscriber Comments

ALIGNMENT (Price & Volume)

The Dow Industrial's primary trend is down and has produced a -16% return. Talks of new bull market are premature. Why are stocks rallying? Energy.

ENERGY (Diffusion Index)

The countertrend rally will continue until the bullish energy build has been drained. US stocks, especially the Dow Industrials, Transports, and old economy stocks could easily retest or break the March low. This does not apply to the Nasdaq 100. The zero fee commission traders do not understand energy, so they'll likely be fully committed on the long side during the retest.

Notice how energy (DI) is beginning to fall as participation (WA) is rising. The retail investor, heavily short at the low is beginning to chase. Violent churn is allowing smart money to sell in June, thus, pushing DI lower. DI should fall rapidly in the coming weeks.

Dow Industrial DI

Participation (ProIndex)

The ProIndex is also beginning to weaken. Nobody cares as long as prices continue to rally, but watch it closely. The ProIndex will make lower highs if professionals keep selling. The surge in the PubIndex defines retail's increasing interest in the rally. This is a warning.

Professional selling is even more intense in Transports and Financial sectors. Again, nobody cares because price is rallying, but the Transports weak performance warns that the global economy is weak. Look at the public buying in the Transports! Please do not follow the public here.

Dow Industrials ProIndex

Dow Transports ProIndex

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