Another Look At The Nasdaq Transports And Dow Theory
The NTI is a substantially more representative look at reality comparative to the very narrowly focused and improperly focused Dow Transports. Dow Theory holds weight because it was representative of the railroad business in the United States. Now the Dow Transports are comprised of a handful of companies, many of which have little to do with transportation in the American industrial economy. As we have highlighted previously, the NTI is a far better representation of the underlying economy. Noticeably, it rallied a little over a month off of the March low in what has been a liquidity-driven eight month rally.
Except for a minor breakout which has now failed, at least for now, the NTI has done nothing for six months. NTI firms are not highly liquid and don't have large derivatives markets associated with them, ie Wall Street and hedge funds won't seek them out as a trade => They are far less prone to manipulation by Frankenstein finance and Wall Street mobsters.
These are firms whose stock results more appropriately reflect the reality of fundamentals and are drive more by the underlying economy and long term investors seeking value or investment sustainability. Huh? I know those terms mean nothing anymore but eventually they will mean everything.
On a final note, I'm a big believer in three wave counts for corrections. (As highlighted below) Whether they are usable as an investment tool is highly dubious but I do believe there is a recurring pattern of a correction's initial pulse, followed by a countertrend move then a final pulse. Notice I said three wave counts for a correction. By correction I mean a move counter to the prevailing trend. In other words, in a bear market, a rally such as we have seen in the last eight months, is a correction - common sense but counterintuitive. That is, unless you believe we are in a bull market.
Except for a minor breakout which has now failed, at least for now, the NTI has done nothing for six months. NTI firms are not highly liquid and don't have large derivatives markets associated with them, ie Wall Street and hedge funds won't seek them out as a trade => They are far less prone to manipulation by Frankenstein finance and Wall Street mobsters.
These are firms whose stock results more appropriately reflect the reality of fundamentals and are drive more by the underlying economy and long term investors seeking value or investment sustainability. Huh? I know those terms mean nothing anymore but eventually they will mean everything.
On a final note, I'm a big believer in three wave counts for corrections. (As highlighted below) Whether they are usable as an investment tool is highly dubious but I do believe there is a recurring pattern of a correction's initial pulse, followed by a countertrend move then a final pulse. Notice I said three wave counts for a correction. By correction I mean a move counter to the prevailing trend. In other words, in a bear market, a rally such as we have seen in the last eight months, is a correction - common sense but counterintuitive. That is, unless you believe we are in a bull market.
<< Home