Dow Jones Transportation Index: Early Warning System
- Posted by DynamicHedge
- on February 2nd, 2011
The stock market is gripped in a mini-mania. Asset prices are rising, fueled in part by a recovering economy, in part by an under-invested/pessimistic public and in part by POMO, the threat of more POMO, QE2, and the threat of QE3.
This chart shows that there are some cracks starting to form in the rally. The Dow Transports are not following the latest new high in the S&P. In fact, there is some serious divergence in the chart.
I don’t feel that we will stop on a dime here, we could easily see another 10-30 points of upside.
If you doubt the significance of the Dow Transport Index, go find a crusty old millionaire who started out at E.F. Hutton and ask him what he thinks about it. The old-timers pay close attention to this one.
Disclaimer: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please click here for a full disclaimer.
-
DynamicHedge is an equities, futures and derivatives trader based on the West Coast. He runs a long/short opportunistic relative-value strategy within a proprietary trading group. More
-
-
-
Recent Posts
- How Value Investors View Bitcoin
- Trusting your Intuition in Financial Markets
- Total Coin Supply and Disinflation in ICOs
- Tokens, Blockchain, and Bubbles
- Three Ways To Be In Service To the Market
- Underlying behavioral trends
- Pattern Recognition vs Pattern Matching
- Seasons of the market
- Volatility expands at the end of a bull market
- Market maps and cycle changes
-
Archives
