I pointed out to subscribers the other day when the transports closed below the Aug. 16th close that we now had a Dow Theory nonconfirmation. Let's take a look at the weekly chart of the transports shall we. We see the 65 week moving average that has supported every decline since the 02 bottom decisively penetrated this week. We see that moving average ready to roll over unless the transports can mount a powerful rally and quickly. The tranny's are already down 16% from the peak. We are dangerously close to an official bear market in the transports. What's even more disturbing is this index still isn't oversold on a weekly basis yet. True bear markets can not only get severely oversold but they can stay oversold. I'll be watching this closely.
Market Direction Change
2 weeks ago