Nonconfirmation Comes To The Averages

There is an unfortunate tendency in the "street" to overstress any such divergence, particularly when it can be twisted into a favorable sign. The fact is that, in Dow Theory, the refusal of one average to confirm the other can never produce a positive signal of any sort. It has only negative connotations. Divergences sometimes occur at reversals in the Major trend ... but they also occur with at least equal frequency at times when no Major reversal is developing ...