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 TECHNICALS
DJ Transport / DJ Industrial Technicals: A Tale of Two Worlds ?
 January 6 ( From TradingView )
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The Situation

We just start to realize how deep the correction was on the ​​US equity market:
On the low made on August 24 2015 on the Dow Jones Transports ( DJT ) at
​7452.70, even if few realize that the DJT now trade below that level.
​( See first chart below: Amber Trendline )
​​​
Rebounding from those abyssmal technical levels was quite a statement
​from Mr Market in August but since then more and more divergence occuring
​between theMighty Dow Jones Transportation Average Index (DJT) and the
​Dow Jones Industrial Average (DJI)​.

​​In fact, different technical indicators or trendline make a huge divergence:


Why so: ​
1) DJI closed at 17158.66 on January 5 2016 and it is slightly below its
​20 DMA ( Day Moving Average ) at 17465.35, and the 200 DMA at 17524.61 and the 50 DMA​ at 17615.52.  ​​
​( See first chart below )​


​2) DJT closed at 7363.95 on January 5 2016 it is well below its 20 DMA at 7556.08, and the 50 DMA at 7913.11 but most importantly well below its 200 DMA at 8219.30. ​​( See second chart below )​

3) DJI is now testing the Major Support Trendline that started back on December 16 2014.
​​​​( See first chart below - Thick Red Trendline )

​​4) DJT broke on May 22 2015 the Major Support Trendline that started back on December 17 2014 and closed below its close reached on April 15 2014. ​​​​( See second chart below - Thick Red Trendline )​

5) SP500 Index is at only 5.5% from its peak reached on May 20 2015 and DJI at 6.5% from May 19 2015 peak.

​​6) DJT is at 20.9% from its peak reached on November 28 2014.​

​ONE chart below is worth a look where we will show the ratio of the ​​Dow Jones Transportation (DJT) ​to the Mighty Dow Jones Industrial Average (DJI)​.​( Bottom Chart )...

​Since October 15, the 50 Day Moving Average on that ratio started a brand new downtrend​ ​( DJ Transport started to underperform the DJ Industrial  ); It reached a level last seen in Sepyember 2013... ​
( Bottom Chart - Grey Line )

​​
​​​But the interesting technical factors is that it is the first time that we have a Major Divergence since the past two years as the ratio is making lower highs but not the Mighty SP500. Quite surprising that DJ Transportation underperform with Oil price historically low...​​  Time to reconsider the Dow Jones Theory ?





​​





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Charles Dow
DJ Transport / DJ Industrial Technicals: A Tale of Two Worlds ? $DJT, $SPY #investing #dowtheory #SP500 #dowjonestransport

Dow Jones Transportation ​(DJT) ( Daily Candles )
​20 DMA ( Yellow Line )
​50 DMA ( Red Line )​
200 DMA ( Green Line )​

Financialiceberg.Com
Financialiceberg.Com
Dow Jones Industrial Average (DJI)​ ( Daily Candles )
20 DMA ( Yellow Line )
​50 DMA ( Red Line )​
200 DMA ( Green Line )​ ​
RATIO
Dow Jones Transport (DJT) ​
Dow Jones Industrial Average (DJI)​ ( Top Panel - Blue Line )
50 DMA ( Red Line )​

and SP500 Index​ ( Bottom Panel )

Financialiceberg.Com