Dow Theory failure will mark a new era of deflation, stagflation and underemployment
Marla Guthrie
Feb. 24, 2007

All eyes are on the Dow theory. It says that Dow Industrials and Transportation indices move in tandem. Once each makes a new high, in other words confirm each other, the bull market is real. They did confirm each other last month.

It seems it could be a bull trap. The failure Dow theory in this massive scale will prove that we have into a new era. Dow theory seldom fails except in case of massive bubbles that takes many decades to correct.

The new era is of deflation, depression, underemployment and stagnation. The world economies are interlinked. That is even scarier. A slowdown and deep recession in US will cause collapse of Indian, Chinese and perhaps Japanese economies. That is large chunk of the whole world economic pie!

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The failure Dow theory in this massive scale will prove that we have into a new era. Dow theory seldom fails except in case of massive bubbles that take many decades to correct.
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