One Uptrend Broken, Two Uptrends Still Intact

Today's close on the Dow Jones Industrial Average marks a violation of the March 2008 low. Due to this lower low, the Dow Theory buy signal that was given in April has been invalidated.

Thus, the higher high the Industrials achieved on May 2nd now joins the list of 9 other false uptrend signals given by the Industrials since 1957. In regards to Dow Theory, we now find ourselves in the same situation we were earlier this year with the Transports refusing to make a new intermediate low in parallel to the Industrials. The Transport average would have to decline another 10% from here to violate the last intermediate closing low of 4,398 on March 10th and give a Dow Theory sell signal.

While the Dow Jones Industrials flail around, the uptrends in the S&P (barely) and the Nasdaq Composite are still intact. The S&P sits less than 1% from violating its March intermediate low while the Nasdaq is 6.5% from violating its March intermediate low. Both indexes recently made higher intermediate highs, breaking a 75 calendar day series of lower lows and lower highs that that ran from the December 26th intermediate high to the March 10th intermediate low.

Today marked trading session 26 of a selling stampede which began on May 21st. Said selling stampedes typically run 17 to 27 trading sessions so we'll see if today was the last down trading session of this particular stampede.

Of particular note, the number of bulls in this week's Investor's Intelligence survey has dropped below the key 35% level for the first time since March. So, I think the bottom of this particular intermediate period is at hand. The only question is whether the uptrends in the Nasdaq Composite and, particularly, the S&P can remain intact.