The Dow Jones Industrial Average just went out at new All-time weekly closing highs. The way I learned it was that, “We Don’t Want To Fight Papa Dow”.
One thing we know for sure about new All-time highs is that they are NOT a characteristic of a downtrend. When you go back and find all the best downtrends ever, you’re not going to find many new all-time highs in those trends. In fact, you won’t find any.
And as a public service announcement, if you’re one of those people who approaches life with the mentally that all downtrends start with new all-time highs, please unsubscribe. You’re clearly not listening to anything I’m saying and it’s probably just better that you go away.
For the rest of you who finished 3rd grade math class successfully, here’s the chart of the Dow Jones Industrial Average making new all-time highs:
You’ll notice that these new highs in the Dow Industrials officially confirms the new All-time highs we had already been seeing in the Dow Jones Transportation Average.
You Dow Theory aficionados will certainly appreciate this. And if you’re interested in Dow Theory, I have to be honest and admit that these “confirmations” aren’t even in my top 5 most important Dow Theory Tenets. You can check out my thoughts on that here. Let me know if you agree or not.
In the meantime, here’s an updated chart on the Dow Jones Transportation Average:
This trend of making new All-time highs is being seen around the world too. Here’s the Kingdom of the Netherlands also breaking out.
Notice how all of these new All-time highs are coming out of multi-year bases. Many of these markets have done nothing for 3 years and most of them are actually down since early 2018. This is the opposite of a bubble.
Fight these trends if you’d like.
It’s not surprising one bit, and in fact, just confirms that we should be spending more time looking for stocks to buy, rather than spending our time looking for stocks to sell.
What am I missing?