Tim Wood's Blog

With the last all time closing high on the Dow Jones Industrial Average having occurred on September 18th, it is an indisputable fact that as of this writing, structurally, the advance out of the 2009 low remains intact.

I’m again beginning to hear why “this time is different.” I hear hypothesized reasons why Dow theory is an antiquated relic that is no longer relevant. I hear that the manipulative efforts of the Money Masters have made the cycles irrelevant.

It seems to be human nature to hear what one wants to hear and most advisors, so-called “analysts”, newsletter writers and commentators seem to feed people the popular line. Why?

The talking heads and so-call analysts that are advocates of this being a new bull market have simply not done their homework. In my opinion, as is the case with the public, they too are being lead by emotion.

As a result of the Industrial’s move above their 2007 high last week, there has been a lot of talk about that advance triggering a so-called Dow theory “buy signal.”

Of late, I have been seeing another round of articles circulating the internet claiming that Dow theory is no longer valid. These articles all generally theorize the same common theme in that they claim the Dow theory is an antiquated relic of the past and that for this reason it does not apply in today’s new high tech age.

The vast majority of the public hear what they want to hear and most advisors, so-called “analysts”, newsletter writers and commentators feed people the popular line. Why? Because most people are only capable of linear thinking and they tend to have preconceived notions.

As we have moved toward the election I have continued to hear talk that one candidate would be better for the market than the other. I have also heard that the current administration is responsible for the market advance since 2009.

Let me begin by saying that cycles and Dow theory are two different disciplines. While they can be used to complement one another, they are very much different and for that reason I am not going to incorporate the Dow theory aspects of my work in this article.

As sort of a cycle in and of itself, the question of manipulation seems to periodically surface. When it does, I’m also always asked if the Dow theory or any other technical method is still valid because of all the efforts to manipulate the markets.