Dow Theory in Focus
Is the Dow Transportation Index inability to close above its recent highs a red flag for Dow Theory followers? The theory holds that new highs (lows) in the Dow Industrials, or Transportation index, must be confirmed by new highs (lows) in the other. Failure to do so could imply that the highs (lows) attained in one index are unlikely to follow.
Although, the Dow Jones Transportation Index did end last week above its 2014 record high, its current decline below the latest highs (and 2014 highs) may raise doubts over the continuity of the advances in the Industrials. A possible reason for Wednesday's stock market selloff could be the disconnect between the Fed's higher than expected 3-rate hikes for 2017 and the modest upward revision in GDP to 2.1% from 2.0% in September. And with Yellen re-highlighting throughout her conference that inflation remains below the Fed' target, the question on whether the spike in yields is too unsustainable gains in validity.
May 17, 2017 17:59 | by Ashraf LaidiThe matrix below highlights the 12 trades in EURUSD issued by the Premium Insights since December 2015.
Apr 20, 2017 13:08 | by Ashraf LaidiWe may have started to sound like a broken record with our repeated stance in favour of silver over gold over the last 6-9 months, via our numerous bearish takes on the gold/silver ratio.
Mar 10, 2017 19:58 | by Ashraf LaidiWe know that bond yields and oil generally move in the same, but sometimes the relationship breaks down as it did in last Nov-Dec due to powerful USD rally surging with yields to the extent that...