The Dow Theory Points to an Approaching Bear Market

by Options Sensei

As investors try to suss out whether we are entering a longer-term bull market, one of the tea leave indicators they’re turning to is the Dow Theory.

Dow Theory revolve around the Dow Jones Industrial Average (DJIA) and Dow Jones Transportation Average either confirming or not confirming each other’s trends.

That is if one of its averages (industrial or transportation) advances above a previous important high and is accompanied or followed by a similar advance in the other average.

For example, if the Dow Jones Industrial Average (DJIA) climbs to an intermediate high, the Dow Jones Transportation Average (DJTA) is expected to follow suit within a reasonable period of time.

As you can see, the transports started rolling over in early September before the broader market peaked.   It also has now been…

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