Ask Colin

When I apply Dow Theory I think of the US. Looking at the chart of XAO one could hardly say we are in a similar bear state (at the start of September 2001). How does this then affect Dow Theory? Do you apply for each index?

I think this is a good question and I have said a lot about it in my Shares magazine and Shares Weekly columns. World markets are out of sync. Japan stayed in recession while the US boomed. The US bull market is over I think. However, Australia is still technically in a bull market. This could change very quickly as I have warned this weekend in Shares Weekly. I think you have to look at each market separately. I also have the view that Australia will be hard put to stay a bull in a world recession.