Jack Schannep re-interpretation of Dow Theory...
CHAPEL HILL, NC (MarketWatch) — Not to be left out of today’s burst of optimism on Wall Street, the venerable Dow Theory is close to issuing a buy signal.
That’s because, assuming the stock market holds onto its mid-day gains, both the Dow Jones Industrial Average (DJIA 10,930, +178.35, +1.66%) and the S&P 500 (SPX 1,159, +22.45, +1.97%) will close above their rally highs set on Aug. 9.
If they do, that will constitute a buy signal according to TheDowTheory.com, edited by Jack Schannep. The crucial levels to watch, on his interpretation, are 10,698.75 for the Industrials and 1,127.59 for the S&P 500.
Traditionalists might wonder what the S&P 500 has to do with the Dow Theory, since it traditionally has been based on the action of the two major Dow averages: The Industrials and the Dow Jones Transportation Average /quotes/comstock/10w!i:djt (DJT 4,593, +139.37, +3.13%) . But, according to Schannep’s re-interpretation of the Dow Theory, a Dow Theory buy signal can be triggered whenever two of these three indexes surpass previous significant rally highs.
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