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Point & Go Figure: Dow Jones Industrial Average, Silver


Did you say "clam"?


Market Overview:
The NYSE Percent Above 50-day Moving Average Indicator is in Os, having formed a lower high since April, while the Nasdaq remains in Xs.

Meanwhile, the High-Low Indices for the NYSE reversed up on Friday, though it remains negative (on a sell signal) and shows the same pattern of lower highs and lower lows as many other indicators - a negative divergence compared to the broad indices. The Nasdaq Composite High-Low remains negative, in a column of Os.

The longer-term bullish percents for the NYSE and Nasdaq Composite are both still in Xs, but the larger pattern of lower highs there also remains intact, a significant bearish divergence, but a longer-term one. The more narrow S&P 500 and Nasdaq-100 Bullish Percents both are negative, each in a column of Os and the NDX gave a new sell signal last week by exceeding a previous low.

Charts of Interest:
In the market summary above we mention the bearish divergence in the S&P 500 and the Nasdaq-100 as those indices continue to move higher even with their Bullish Percent indicators negative and moving lower. Let's take a look at a similar and even more obvious bearish divergence with the Dow Jones Industrial Average.

The Dow Jones Industrials are at a new high, above 11,400 for the first time since 2000. However, the Bullish Percent Index for the DJIA is negative and making lower lows, a serious bearish divergence.

Here is a chart of the Dow Jones Industrial Average Bullsih Percent, measuring the percent of Dow 30 stocks on point and figure buy signals.

Dow Jones Industrial Average Bullish Percent
(Chart courtesy

Is this move in silver sustainable? Let's take a look at silver compared to some other parabolic rises. While not necessarily predictive, they do offer us a quick visual perspective. Here is a monthly chart of Silver with Nasdaq-100 overlayed, relative scale as noted on the left. Interesting.
Silver and NDX, Monthly
(Chart courtesy Thomson Financial)

While the monthly chart of Silver and the NDX from back in the day do share some similarities (especially the very large and expanding range price bars near their top) the Silver and Copper charts are also interesting. Huh. What do you know? Silver. Copper. What's the difference? It's all the same to the clam.
Silver and Copper
(Chart courtesy Thomson Financial)

Position in silver

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