- Dow Theory suggests indices must confirm each other and volume must confirm the trend.
- The new downward trend in the Dow Utilities Index suggests indices are starting to break apart in terms of trending in unison.
- Volume recently has been trailing lower, which suggests the momentum behind these new all-time highs is weakening.
- If the Utilities Index continues to move lower and we see increased volume in the selling trend, we will consider the Dow Theory Trend component “broken” and expect a major peak/top soon after.
Chris Vermeulen of the technical traders brings us another great article on the slowing momentum and possible downside risk coming soon.
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