"I am not a Richard Russell subscriber, but in a "come-on", I received an email today from him stating "the May 1 high was not confirmed by Transports. The two averages then turned down and plunged below April lows, thus completing a textbook Dow Theory primary bear signal".

" I am wondering what your technical take is on this?

"Many thanks for your response,"

David Fuller's view There is an indicator to confirm just about every possible market hypothesis, although few of them date back to the legendary Charles Dow of WSJ fame and the long career of his best known disciple, Richard Russell.

All of these indicators have their occasional moments in the sun, usually interspersed with false signals which are more numerous. Meanwhile, the DJIA (weekly & daily) and TRAN (weekly & daily) continue to show relative strength among global stock markets, although mainly within whipsaw, ranging patterns following a loss of upside momentum.

Also, global stock markets have been in a corrective phase following their strong start to the year. While the declines have been interrupted this month in response to short-term oversold conditions, as we also saw in June 2011, we do not currently have conclusive evidence that prior corrections are over. This may require more monetary stimulus, given the global economic background in which economies are synchronised in a slowdown. Meanwhile, there are still some risks to the downside.