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Dow Theory: Two Clear Non-Confirmations Of A Bull Market

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), IYT

On May 19, 2012, we said that the bear market rally had ended. In our view, we believed that the Dow Jones Industrial Average (NYSEARCA:DIA) would not exceed the high of 13,279.32 set on May 1, 2012. The most recent run of the Dow Industrials is causing us to wonder if our assessment was correct.

Despite our concern that the Dow Industrials will increase above 13,279.32, we do need to point out two technical non-confirmations of the market that have been established so far. First is the secular (long-term) level of the market. Ordinarily, the secular (long-term) trend of the market would be bullish when and if both the Industrials and Transports (NYSEARCA:IYT) rise above their respective 2007 to 2012 peaks.

As can be seen in the chart below....

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