Leading Financial Newsletter Profit Confidential Points Out Classic Stock Market Warning

The Dow Theory is flashing a warning signal, according to Michael Lombardi, lead contributor to popular financial newsletter Profit Confidential. In his recent article, Dow Theory Flashes Classic Stock Market Warning.

New York, NY (prHWY.com) March 12, 2012 - The Dow Theory is flashing a warning signal, according to Michael Lombardi, lead contributor to popular financial newsletter Profit Confidential. In his recent article, Dow Theory Flashes Classic Stock Market Warning, Lombardi looks at the relationship between the Dow Jones Industrial Average and the Dow Jones Transportation Index.

"The Dow Theory has been a very good tool over the last 100 years for calling market tops and bottoms," says Lombardi.

The Dow Jones Industrial Average is an index made up of the stocks of 30 large American corporations. The Dow Jones Transportation Index is an index of the largest transportation companies in the U.S.

The Dow Theory states, according to Lombardi, that the rise or fall in the Dow Jones Industrial Average must be confirmed by a rise or fall in the Dow Jones Transportation Index.

"This makes sense, because if the economy is growing, large corporations will do well and, in turn, ship more goods and services across the U.S.," says Lombardi.

Since 2009, the Dow Jones Industrial Average and the Dow Jones Transportation Index have been following each other closely.

"After February 3, 2012, the Dow Jones Industrials continued to climb higher, reaching a four-year high of 13,000, while the Dow Jones Transportation Index has fallen three percent since then," says Lombardi.

With this move in opposite directions between the Dow Jones Industrial Average and the Dow Jones Transportation Index, Lombardi believes it is possible that the Dow Theory is signaling a top in the markets.

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 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 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.

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Tag Words: stock market, dow jones, us economy, michael lombardi, profit confidential

Categories: Finance

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