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The Tell: Dow Theory sell signal is now just one step away from being triggered

The Dow Jones Industrial Average tumbled 424.69 points Friday to close at a four-month low of 23,533.20.

What makes the decline technically very important is that closing below the Feb. eight closing low of 23,860.46 completes half of the final step needed to cause a Dow Theory promote sign, as MarketWatch senior columnist Mark Hulbert defined.

Read: Opinion: The bull marketplace in shares is simply limping along

The Dow Theory is a marketplace timing device that has been relevant on Wall Street for a century. With the Dow DJIA, -1.77% closes at a lower low, after a lower prime, all that’s needed to cause the promote sign is for the Dow Jones Transportation Average DJT, -1.84% to close below its Feb. nine closing low of 10,136.61.

The Dow transports finished Friday down 190.14 points at 10,163.32, that means just a further decline of about 26.71 points, or zero.three%, would be sufficient for the bearish sign.

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