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Dow Theory Confirmation: INDU Closes At New High

Published 05/01/2014, 12:11 AM
Updated 07/09/2023, 06:31 AM

INDU Daily Chart

The concept of confirmation in the Dow Theory states that the primary trend is confirmed when both the industrial and transportation averages reach new secondary highs or lows together on a daily closing basis yet not necessarily at exactly the same time.

The Dow Jones Industrial (INDU) and the Dow Jones Transportation (TRAN) printed its new secondary highs in December 2013 and January 2014, respectively. Both averages experienced a decline in the beginning of 2014 only to start rising in February again. Since then the TRAN has made three consecutive new highs while the INDU has been struggling to overcome its December high. Today the INDU has closed at a new high thus confirming that the market primary uptrend is still intact.

Disclaimer: I express only my personal opinion on the market and do not provide any trading or financial advice (see Disclaimer on my site).

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