Yesterday's market action presented us with an interesting test. The Industrial Average rose 60 points to a new high, while the Transports actually diverged by closing down 18 points. Tuesday's price action gave us a new high in the Dow, unconfirmed by the Transportation Average.
Today, and the rest of the week will afford us an opportunity to see whether the Transport non-confirmation is dangerous or not.
Question -- Russell, I do note the non-confirmation. But what if the Transports now rally and advance to a new high? What then?
Answer -- If the Transports advance to a new high, then obviously the non-confirmation will have been erased. Furthermore, both Averages hitting new highs would ring the "all clear bell," in which case I would expect the market to head higher. If the Industrial Average continues to work its way higher while the Transports advance but remain below their high, the ... Log in or subscribe to continue reading.
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