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DJ Transportation: Divergence Prevail?
 June 16 2016 ( From TradingView )
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The Situation


We just start to realize how deep the correction last summer was on the ​​​US equity market: 
​On the low made on August 24 2015 on the Dow Jones
​Transportation Average ( DJT ) at ​
​7452.70, even if few realize that the DJT
now trade ​just slightly above that level. 
​(See first chart below: Amber Trendline)

​​​
The Mighty Dow Jones Transportation Average Index (DJT) is keeping the same message
as it keep underperforming other Major Indices.​

Here is some Technical Observations:​​​
​1) DJT underperformed with 11.1% from its bottom reached on January 20 2016
​and SP500 is at only 14.3%​​​​ and in a steep uptrend channel. 
(See first chart below)​

​​2) DJT from highest peak price (reached on November 28 2014) to the lowest price yet (reached on
​January 20 2016) was 31.2% and only 15.2% for the Mighty SP500. ​​​​(See first chart below)​

​​​​3) DJT broke on June 13 2016 the Daily Support Trendline that started back on January 20 2016​. ​​​​
​(See first chart below - Red Trendline - Ellipse)​


​​​​​​​4) DJT is now below the Fibonacci Retracement zone of .50% at 7857 (From peak price on May 20 2015 to the Low price on January 20 2016). 

5) ​​On March 18 2016, on a relative basis (the ratio of Dow Jones Transportation ​to the Mighty Dow Jones Industrials) we kissed the 200 DMA (Day Moving Average) ​​(See second chart below - Green Line - Ellipse)​ and failed to stay above and now back near the low zone reached on May 16 2016. ​​(See second chart below - Bottom Right Ellipse)​

​​6) ​​Almost the same battle with the Mighty SP500 Index on a relative basis. The ratio (Dow Jones Transportation ​to the Mighty SP500 Index) tested the 200 DMA (Day Moving Average) on April 21 2016
​ 
​(See third chart below - Green Line - Ellipse)​ and we are back below the previous low level reached on May 16 2016. ​​
​(See third chart below - Bottom Right Ellipse)​

 ​
As the ​​​​​Mighty SP500 Index got over the previous peak reached on November 3 2015, the Dow Jones Transportation ​it failed to reach yet the 8300 zone peak  in November 2015; it is still into a lower highs and lower lows technical pattern, a completely different pattern than the SP500 Index. ​​​(See First Chart - Thick Amber Trendline - Ellipse)

​​But most importantly, what puzzle me the most is that, a Big Divergence continue to prevail between Dow Jones Transportation the Dow Jones Industrials and the Mighty SP500 Index. As the keep underperforming, it become a serious warning from the Dow Theory.






​​




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Charles Dow
DJ Transportation: Divergence Prevail? $DJT, $SPY #investing #dowtheory #SP500 #dowjonestransport

Dow Jones Transportation ​
​( Daiy Candles )
​20 DMA ( Day Moving Average - Yellow Line )​
50 DMA ( Day Moving Average - Red Line )​​
200 DMA ( Day Moving Average - Green Line )​​

Financialiceberg.Com
Financialiceberg.Com
Daily RATIO ( Blue Line )
Dow Jones Transportation ​
over​
​Dow Jones Industrials ​
20 DMA ( Day Moving Average - Yellow Line )​
50 DMA ( Day Moving Average - Red Line )​​
200 DMA ( Day Moving Average - Green Line )​​

Daily RATIO ( Blue Line )
Dow Jones Transportation ​
over​
​SP500 Index ​
20 DMA ( Day Moving Average - Yellow Line )​
50 DMA ( Day Moving Average - Red Line )​​
200 DMA ( Day Moving Average - Green Line )​​

Financialiceberg.Com