Dow Theory Sends Bullish Message

Published 11/03/2014, 03:43 PM

 Dow Industrials, Transports And Utilities

Definition of Dow Theory --  A theory that says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high, and is accompanied or followed by a similar advance in the other.

With a wild October now in the books, I wanted to share a quick update on the big three Dow Indexes at the end of the month.

As you can see in the chart above, all three closed at monthly all-time highs -- at the same time. 

The Dow And Presidential Cycles

My good friend Ryan Detrick put this chart together, which shows that during the sixth year of a presidents term,  the average gain between now and the end of the year is around 7%.  

Will the combo of a Dow Theory buy signal and strong seasonal performance increase the odds of a Santa Claus rally?  Stay tuned.

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