Wednesday, March 29th, 2017 MST

Dow Transports see “death cross”

On March 25, I presented evidence that perhaps stocks were topping and that it would be prudent to move from overvalued stocks to undervalued gold and silver.  Now, Matthew Kerkhoff, a regular contributor to Richard Russell’s’ Dow Theory Letters, suggests the same.

Actually, not exactly the same.  Kerkhoff doesn’t recommend moving to the metals, only that stocks are showing signs of topping.

Kerkhoff wrote May 29, 2015:

“It’s not a death sentence for the market, but the action in the Transports is becoming more and more ominous. In the chart below we can see two recent developments, both of them bearish. This leading index has now fallen below the lower trendline of its downward sloping channel, and at the same time triggered the dreaded death cross.

“In the circle below you can see the 50-day moving average crossing below the longer-term 200-day moving average (death cross), confirming what has already been very evident: the Transports are getting weaker and bucking the bullish trend elsewhere in the markets.”

5.29.15 trans index graph

Prolonged declines in stocks historically have seen sustained increases in gold and silver prices.

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