A Dow Theory ‘sell’ signal could happen any day now

tomorton · Apr 1, 2018

For me the Dow sell signal came when it closed below the 50EMA on 05/02. This obvious feature usually suggests the probability of further falls is greater than the probability of further rises.

yiehom · Apr 1, 2018

Looks like there have been some lower highs and lows between end 2015 and feb. 2016. Curious how end of year rally traders navigated.
A note re. the S/R lines: they are not from that period, but from now.

murray t turtle · Apr 2, 2018

yiehom said:
Do you mean there were no lower low and lower high since then? It might depend on the timeframe.

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Exactly yiehom; i dont study DOW /DIA much , except for 1920s + 1930s.Many Traders, media do study it. And SPY,QQQ..... are above 200 day moving average, but below 50 day moving average. I'm still bullish on tech stocks ;bearish on GE again, but below 50 DMA+ some sell in May, OK. NOT a prediction ;not bank insured, may lose value ,as the WSJ/IBD ads warn LOL

murray t turtle · Apr 2, 2018

tomorton said:
For me the Dow sell signal came when it closed below the 50EMA on 05/02. This obvious feature usually suggests the probability of further falls is greater than the probability of further rises.

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Let see what it [SPY, QQQ....] does around 200 day moving average, yes it lags; + i noticed some times they sell around APR 15. Some may try to front run sell in May OK. NOT a prediction

SunTrader · Apr 10, 2018

There is theory and there is trading.

Dow surges nearly 400 points, defying a bearish ‘sell signal’ — here’s a theory as to why

https://www.marketwatch.com/story/w...t-a-bearish-dow-theory-sell-signal-2018-04-10

murray t turtle · Apr 13, 2018

tomorton said:
For me the Dow sell signal came when it closed below the 50EMA on 05/02. This obvious feature usually suggests the probability of further falls is greater than the probability of further rises.

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Good timing with 20 period ma;
but I don't think DOW theory has a 2 period in it . DOW Jones uses 65 day moving average/candlecharts - but that is too little, to late for me. 65 dma may be; a way to sell newspapers LOL X 50

padutrader · May 23, 2018

tomorton said:
For me the Dow sell signal came when it closed below the 50EMA on 05/02. This obvious feature usually suggests the probability of further falls is greater than the probability of further rises.

you may be right but if 50 ema is above the 200 ema, it is a buy signal not a sell

because the shorter term ema is down while the longer term ema is up

tomorton · May 23, 2018

traderGOD said:
you may be right but if 50 ema is above the 200 ema, it is a buy signal not a sell

because the shorter term ema is down while the longer term ema is up

If you wait for the 50 to cross below the 200 in order to close long positions you will have a painful road to travel. And you cannot possibly recommend blindly buying equities on any day when the Dow's 50 is above its 200 surely?

If you're long equities I would recommend selling them when the Dow/S&P closes below the 50EMA - don't wait for the equities'charts to turn down.

padutrader · May 23, 2018

tomorton said:
If you wait for the 50 to cross below the 200 in order to close long positions you will have a painful road to travel. And you cannot possibly recommend blindly buying equities on any day when the Dow's 50 is above its 200 surely?

If you're long equities I would recommend selling them when the Dow/S&P closes below the 50EMA - don't wait for the equities'charts to turn down.

i have cleaned up my charts,if you see the latest post in my journal, you will see that, but the only thing that was mentioned in your post i quoted, was the 50 ema.

While the move up of the dow looks climactic, i see no top; as yet!
after such a rise i do not expect dow to fall in the same manner as it went up.

everyone i have talked to is bearish,so it will not fall.
if everyone is bearish who will the big boys sell to?.Nobody is willing to buy.

so they will / have to make everybody bullish so that they can distribute.The only way this will be done is to take the market up;the cheap way for them to distribute, and the best way for them, is to cause a bear squeeze.
this is the plan i think

so the dow will break the low it made and then the [bear] trap will be sprung

i think the dow will go to 28000-29000 but it may go down first, for the bear trap,or it would race up for both the bull and bear squeeze

tomorton · May 23, 2018

traderGOD said:
i have cleaned up my charts,if you see the latest post in my journal, you will see that, but the only thing that was mentioned in your post i quoted, was the 50 ema.

While the move up of the dow looks climactic, i see no top; as yet!
after such a rise i do not expect dow to fall in the same manner as it went up.

everyone i have talked to is bearish,so it will not fall.
if everyone is bearish who will the big boys sell to?.Nobody is willing to buy.

so they will / have to make everybody bullish so that they can distribute.The only way this will be done is to take the market up;the cheap way for them to distribute, and the best way for them, is to cause a bear squeeze.
this is the plan i think

so the dow will break the low it made and then the [bear] trap will be sprung

i think the dow will go to 28000-29000 but it may go down first, for the bear trap,or it would race up for both the bull and bear squeeze

I agree, I see no top in the Dow. But, the absence of evidence of a top is not evidence of absence of a top.

Since February, it has not been worth the risk to buy the Dow as it has been impossible to say we have not had a top. We have not formed a downtrend, but price has not been rising in an uptrend either so cash has been the best bet.

I have taken a small long position in the S&P, but that was only based on a small recent bull flag, not a full-on uptrend trade.