Present and Probable Market Direction
27 April 2025
The market closed on Friday April 25th with the Dow Transportation average confirming a bottom. Both the Dow Industrials Average and the Dow Transportation average have confirmed intermediate bottoms. The Dow Industrials more recently also confirmed a new intermediate top. The next important step to watch for is the Dow Transportation Average to create an intermediate top. The Dow Transportations creating a top would mean that both indexes would be in a new trading range.
These set ups take a little bit of time versus those who like short term trading or day trading. The purpose of this system is to keep you informed of the primary trend, whether up or down, so you can make your decisions regarding your portfolio. The majority of stocks, whether good or bad quality move in the direction of the primary trend.
Both Indexes have to confirm each other to be a valid signal for market direction. In the current situation the Dow Transports will need to form an intemediate top to create a new trading range. Both indexes breaking out of the top of a range indicates a reversal and a new rising market. Both indexes falling through their primary bottoms will give a continuation of the current downtrend.
The current highest 20 year AAA corporate rates are approximately 4.99%. These rates have come down slightly which means corporate stock valuations should be improving because the cost of operating money is going down. Interest rates have a large impact on stock valuation.
Stocks courtesy of Stockcharts.com at http://stockcharts.com
