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DJ Transports / SP500 Index Technicals: A Tale of Two Worlds ?
December 7 ( 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 SP500 Index.

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

Why so:
1) SP500 Index closed at 2091.69 on December 4 2015 and it is well above its
20 DMA ( Day Moving Average ) at 2075.98, and the 50 DMA at 2041.97
and also the 200 DMA at 2064.75. ( See first chart below )

2) DJT closed at 7954.83 on December 4 2015 it is well below its 20 DMA at 8138.65, and the 50 DMA at 8102.92 but most importantly well below its 200 DMA at 8367.65. ( See second chart below )

3) SP500 Index is in process of breaking the Major Resistance Trendline that started back on December 16 2014. ( See first chart below - Thick Red Trendline )

4) DJT is quite far of the Major Resistance Trendline that started back on December 17 2014.
( See second chart below - Thick Red Trendline )

5) SP500 Index is at only 1.6% from its peak reached on May 20 2015.

6) DJT is at 13.5% 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 to the Mighty SP500 ( Bottom Chart )...

Since October 26, the 50 Day Moving Average on that ratio started a brand new downtrend ( DJ Transport started to underperform the SP500 ); It reached a level last seen in August 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...

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Charles Dow

DJ Transports / SP500 Index Technicals: A Tale of Two Worlds ? $DJT, $SPY #investing #dowtheory #SP500 #dowjonestransport

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

Financialiceberg.Com

SP500 Index ( Daily Candles )
20 DMA ( Yellow Line )
50 DMA ( Red Line )
200 DMA ( Green Line )

RATIO
Dow Jones Transport
SP500 Index ( Top Panel - Blue Line )
50 DMA ( Red Line )

and SP500 Index ( Bottom Panel )

Financialiceberg.Com