In a normal market, the wide disparity between the Dow Jones Industrial Average and technicals would be screaming an ugly message, but these are not normal times.

That’s because the massive amount of headline risk-market moves driven by the constant churn of big news events-is at an apex and rendering the aforementioned cornerstone of Dow Theory extremely unreliable…if not useless.

Blame it on Greece, if you will, as the seemingly daily twists and turns to the European debt saga are essentially the only market movers nowadays.

“In the short term, we know the market is run by headlines and emotions. Dow Theory says that’s not the case, but in reality we know that is the case,” says Andre Julian, senior market strategist at OpVest Wealth Management. “Whatever happens in Europe is what drives the market. In the very short term, it’s tough to look at technicals.”

Dow Theory has six basic tenets at its core-entailing market cycles and trends, volume, the discounting of news, and trend confirmation-but perhaps the most widely followed is that any market rally has to be confirmed by the transportation sector. By that measure, the third quarter was an abysmal sign for those hoping the market moves higher. For more visit: Yahoo Finance

Similar Posts:

• U.S. and EU upbeat debt news fuels rally
• Close below 200 DMA will indicate bear market
• Market likely to be choppy, but traders see no major correction
• Soaring VIX Index May Signal More Trouble Ahead for Stocks
• 7 out of 91 EU banks fail worst case stress test scenario