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 TECHNICALS
DJ Transport / DJ Industrial Technicals: A Tale of Two Worlds - Part II ?
 December 9 ( 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 on the Dow Jones Transports ( DJT ) at 7452.70,
the last time we reached that level was back on April​ 15 2014.
​( See first chart below: Amber Trendline )
​​​
Rebounding from those abyssmal technical levels was quite a statement
​from Mr Market but more and more divergence occuring between the
Mighty 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 17568.00 on December 8 2015 and it is slightly below its
​20 DMA ( Day Moving Average ) at 17679.92, and the 200 DMA at 17574.97 but above the 50 DMA​ at 17421.22.  ​​( See first chart below )​

​2) DJT closed at 7663.24 on December 8 2015 it is well below its 20 DMA at 8093.22, and the 50 DMA at 8103.35 but most importantly well below its 200 DMA at 8353.78. ​​( See second chart below )​

3) DJI is still well above the Major Resistance Trendline that started back on December 16 2014.
​​​​( See first chart below - Thick Red Trendline )

​​4) DJT broke on May 22 2015 the Major Resistance Trendline that started back on December 17 2014 and closed below its low reached on October 13 2014. ​​​​( See second chart below - Thick Red Trendline )​

5) SP500 Index is at only 4.2% from its peak reached on May 19 2015.​

​​6) DJT is at 17.7% 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 October 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 - Part II ? $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