There They Go Again: Dow Transports/Industrials Divergence

The Dow Transports are selling off as the Industrials are making new highs.  That’s a no no in Dow Theory.   We pointed out a similar divergence on August 1st.

Not as relevant as it used to be,  but something to keep on your radar.  Transports approaching 200-day moving average at 9,117.59 (corrected on Aug. 19) and diverging from Industrials.  — GMM, August 1

The divergence signaled the 2 percent correction in the Dow Jones Industrials, which began on August 7th.   Note also the Transports 50-day moving average is just 0.25 percent lower.

Looks like the market going to hand it off to energy sector into year-end.   In a normal market,  Transports sell with rising energy.   Crude oil closed over $57 p/bbl today.

Transports and Industrials_Nov6

 

 

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