Transports Lagging

Bulls will have been following the gains in the Nasdaq and Nasdaq 100 with great pleasure, even the Dow managed a piece of the bullish action in recent days. However, Dow Theorists will be concerned by the lack of participation from the Transport Index. If ever there was a trading no-mans land the Transports are in it.

It would take a sustained gain for the Transports to generate a "Golden Cross" and it's hard to see this happening as broader indices struggle to challenge June highs. Bulls can take some comfort from a potential ascending triangle but should the index fall back from its 200-day MA and test its support there isn't much wiggle room should support break.

A 50% trim of the March-June rally could see this challenge 2,800s (or the early April reaction low).

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

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