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What Dow Theory Says About This Rally Will Surprise You – MarketWatch

July 13
14:16 2016

CHAPEL HILL, N.C. (MarketWatch) — The bear market in stocks remains alive and well, according to the oldest stock-market-timing system that remains in widespread use today.

I’m referring to the famous Dow Theory, which was created a century ago by William Peter Hamilton, who at the time was editor of the Wall Street Journal.

It’s not that Dow Theorists are unimpressed by the strength of the stock market’s recovery from its post-Brexit plunge, which has taken many averages to new all-time highs. But a Dow Theory “buy” signal requires the market to first undergo a series of backings and fillings, and stocks’ nearly uninterrupted rally over the past couple of weeks doesn’t satisfy.

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