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 TECHNICALS
DJ Transports / SP500 Index Technicals: A Tale of Two Worlds ?
 October 29  ( 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 techncal indicators or trendline make a huge divergence:


Why so: ​
1) SP500 Index closed at 2090.25 on October 28 2015 and it is well above its
​20 DMA ( Day Moving Average ) at 2018.85, and the 50 DMA at 1978.91
and also the 200 DMA​ at 2060.76.  ​​( See first chart below )​

​2) DJT closed at 8070.08 on October 28 2015 it is above only the 50 DMA at 7989.32, below its 20 DMA at 8115.56 and well below its 200 DMA at 8467.44. ​​( 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 - Red Trendline )

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

5) SP500 Index is at only 2.1% from its peak reached on May 20 2015.​

​​6) DJT is at 13.3% 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 and the Dow Jones Industrials compare ​to the Mighty SP500 ​( Bottom Chart )...

​Since October 27, the 50 Day Moving Average on that ratio started a brand new downtrend​ ​( DJ Transport started to underperform the Industrials ); It reached a level last seen in March 2014... ​( 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
Financialiceberg.Com
SP500 Index ( Daily Candles )
20 DMA ( Yellow Line )
​50 DMA ( Red Line )​
200 DMA ( Green Line )​ ​
RATIO
Dow Jones Transport ​
​Dow Jones Industrials ( Top Panel - Blue Line )
50 DMA ( Red Line )​

and SP500 Index​ ( Bottom Panel )

Financialiceberg.Com