New York, NY (PRWEB) October 06, 2012
According to Michael Lombardi, financial expert and lead contributor to Profit Confidential, the Dow Theory is warning stock market investors of a market top. The Dow Jones Industrial Average has risen more than 11%, and Lombardi believes the reason behind the rise is the extreme money printing by the Federal Reserve.
In the article “Dow Theory Flashes Sell Signal,” Lombardi explains the Dow Theory and how it is signaling a possible trend reversal.
“Dow Theory simply states that the stock market is in an uptrend when one of two major Dow Jones components, the Dow Jones Industrial Average and Dow Jones Transportation Index, breaks above a previous high at the same time or close to the same time,” says Lombardi.
The Dow Jones Industrial Average, consisting of 30 major companies, is currently seeing a robust move to the upside for stock prices, Lombardi notes. On the other hand, he points out that the Dow Jones Transportation Index, consisting of 20 major transportation companies, has been struggling and actually decreasing in value.
“The Dow Jones Transportation Index and the Dow Jones Industrial Average were following each other very closely,” reports Lombardi. “… But near the beginning of July 2012, the averages started to go in opposite directions.”
Lombardi points out that, since mid-September, these two main Dow Jones indices have been diverging: “The Dow Jones Industrial Average has been rising, while the Dow Jones Transportation Index has been in a free-fall,” he says.
Lombardi says that this divergence between these two Dow Jones indices is a cautionary sign, as he concludes that the stock market is rising on nothing but thin air.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.