We are dealing with a most extraordinary technical situation. The D-J Industrial Average has been fairly firm, and ordinarily we would probably expect it to rally above, and close above, its May 1 peak. But ironically, the Transportation Average remains weak and shows a series of declining tops.
So if the Dow rallies and closes above its May 1 peak of 13, 279.32, it will be doing that almost surely without a confirmation by the weaker Transportation Average.
In the past, I've always compared the market to a living beast. At this time, the beast is a bear, and the beast would love to decline while taking the greatest number of investors with him.
So what's happening? The Industrial Average does not want to close above its May peak alone, in a situation where it is unconfirmed by the Transports. Why is this? Because the market does not want to deal with an ... Log in or subscribe to continue reading.
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