Dow Transports reconfirming the market’s bullish primary trend under the Dow Theory – bull trap or bear killing spree?
Marla Guthrie
Feb. 8, 2007

Dow Transports reached all-time highs, closing above 4998.95 for the first time since May and reconfirming the market’s bullish primary trend under the Dow Theory. The biggest question now is this a bull trap or the last chance for the bears to put their cash to work.

According to some analytics it may not be either. Dow is fundamentally weak. But the excess liquidity in the system is creating this great bull market. The liquidity pool is so vast that the market can stay where it is for long time.

Dow Theory says it is bullish if Industrials and Transportation indices confirm each other with new highs. But Dow Theory has also failed several times in the past.

Many analysts believe, Dow and Gold both will appreciate but very slowly over a long period of time. Of course it is possible for Dow to collapse because of deflation in the economy.

Slightly higher Initial Jobless Claims, lower Wholesale Inventories and lower Wholesale Sales pointing to stagflation slowly changing to deflation – how will markets react
Alan Hershey
. The speculative mania reached new highs in most of the asset classes. As stagflation changed to deflation, the Employment and Wholesale Inventories showed no significant changes. People were complacent till the day of the stock market crash.
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In 1920s real estate collapse and stagflation preceded the stock market crash, deflation and depression – history repeating again?
Peter Oberois
In the middle of all this like in year 1929, the year 2007 marks the end of a twenty year banking bull market. The banks based on cycle study will start going belly up.
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Dow Transports reconfirming the market’s bullish primary trend under the Dow Theory – bull trap or bear killing spree?
Marla Guthrie
The biggest question now is this a bull trap or the last chance for the bears to put their cash to work.
READ MORE>>

Oil can stay between $55 and $65 for a long time before going down – a definite bullish scenario for Canadian Dollar and Sugar
Sam Adelton
Canadian dollar is also bullish because oil and natural gas are going up. The commercials will need to buy Canadian Dollar and sell US Dollar to pay for Canadian oil and gas.
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Mortgage refinancing difficulties have started pushing homeowners on the edge – foreclosed homes a new investment vehicle
Joe Weinman
These smart investors are actually accumulating properties with a hope they can flip the same during summer and after. The real estate market can rally this summer. Sentiment indicators show too many bears around real estate – and that is bullish.
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Deflation in Japan a serious problem - Japan Bank lending fails to accelerate – yen can drop further before rising
Sonia Parker
Japanese economy is still showing signs of trouble. Japan Bank lending failed to accelerate. That will provide enough anxiety for Bank of Japan.
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Water shortage in India and China will be the root cause for world depression – Dow can collapse to 4,000
Glen Mendolsa
It is just the question of time. The ‘High Flying’ economies have their one engine on fire. The water shortage and lack of clean usable water will be root cause for a sudden and vicious world depression that can drag Dow down to 4,000...
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