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Dow Theory Divergence 2024

March 11, 2024

Stocks are down again to start the week.

All of this while Bitcoin is making new all-time highs this morning:

BTCUSD: $72,000

Get all our Crypto Trades Here - Bitcoin and Altcoins

Meanwhile, there's a Dow Theory Divergence that continues to cast a huge cloud over the US Stock Market.

We saw the exact same divergence just before the Covid crash.

Notice how the Dow Jones Industrial Average is making new highs, but the Dow Jones Transportation Average is nowhere near new highs.

This happened right before the COVID crash in 2020 as well.

I take these indexes very seriously.

The way I learned it was, "Don't Fight Papa Dow".

And ignoring this divergence would be doing exactly that, fighting Papa Dow.

The idea is to NOT do that.

So what does this mean? What should we do about this?

I think you should do whatever is best for you.

Everyone has different objectives in the market, different time horizons, and certainly different levels of risk tolerance.

For me, it's just another reason to proceed with caution in the U.S. Stock Market, and pick your spots.

Apple, formerly America's largest and most important stock, is already down $450 Billion in value, just over the past couple of months.

This is a completely different environment than the one we were in last year.

To suggest otherwise, I believe, would be irresponsible.

This Dow Theory Divergence above is just another thorn on the side of the bulls.

Historically, when one of these two indexes are making new highs, the other one shouldn't be too far behind. The sooner they confirm one another, the stronger the trend.

The longer it takes for them to confirm, the weaker the situation. In the worst of situations, the second one doesn't confirm at all.

We saw that right before COVID.

And we're seeing it now.

We discussed this all on last week's LIVE Conference Call.

Watch the replay and download the slides here.

Bitcoin New All-time High

Bitcoin just hit new all-time highs this morning.

The Nasdaq leaders are falling one by one, with Apple, Google and Tesla all hitting new relative lows last week.

Are you paying attention? What are you doing about it?

Have you seen what's happening in cryptocurrency markets?

It's not just Bitcoin that's making moves. You can see the action popping off in the smaller Micro-Cryptos.

This is where the alpha is coming from this cycle.

And we're more ready for it than ever!

Take a risk-free look...

As always, if you have any questions about recent price action and what's happening with markets right now, you can always drop us an email.