The Dow has been too murky to trade

The Dow Jones has been a hard market to read recently, says John C Burford. But now the fog is beginning to clear.

It has been some time since I covered the Dow. The main reason is that the chart patterns were very confused (at least they were to me). What appeared to be the start of a major leg down off the 19 May high actually turned out to be something else and that has only become apparent to me in recent days.So today, I believe I have a better handle on the patterns now forming.

Incidentally, I have noted before the yawning gap between the stockmarket and the real US economy. When the economic news was poor, stocks got a boost. It was a case of bad news equals good. Investors were led to believe that the Fed would be less inclined to raise interest rates, which would have a bullish impact on stocks.

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.