As most Dow Theory buffs already know, the Dow Transportation Index is not confirming the most recent highs on the Dow Industrial.
Is that a concern for today’s bull run?
It might be. Particularly, if we consider the following facts. The index has a weak technical set up. And while some people might see it as a period of consolidations, others might see it as a period of distribution. There is now way to tell. Further, the transports have failed to advance even though oil prices have collapsed. Being one of the primary beneficiaries of lower oil prices, this should’t be the case.
In other words, when it’s all said and done, some people might see this as a bearish divergence. I thought you should know.
