Transports Celebrating the Dow Confirmation
- Posted by Greg Harmon
- on November 5th, 2013
(Sorry Prince is kind of a douche about sharing video…)
The Dow Jones Industrial Average ($DJIA, $DIA) confirmed Dow Theory last week, making a new all time high, to go along with the all time high made in the Dow Transports ($TRAN, $IYT) in mid October. For you non Dow Theory people, notice that this lagged by 12 days. Stop getting bent out of shape about a time lag. This is an indicator for a long term trend confirmation, not for day traders. What has happened since then? The Transports are partying like its 1999. The Transport Index is moving back higher again and has a Measured Move higher to 7592. With the RSI over 70 and the MACD at high
levels it is unlikely to happen in a straight line. But the prospect shows the strength in the market. Not frothiness, don’t get the wrong impression from the Prince video. But when stocks like Kansas City Southern are ready to break out you have to be involved. Why even the Dow itself started back higher after only a 2 day pullback. Should it continue the Measured Move higher would take it to 16545. Hmm, where does that number sound familiar from? Oh yeah, it is only 1.5% from the target for year end established for the Dow back on May 8th . Isn’t it funny how these things work sometimes?
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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