Tuesday, February 28, 2012

More divergences

I've presented the thesis in my commentaries and in some of these posts that we are probably going to work off any correction in stocks with sideways price action.  And here's a daily chart of the Dow Transports which have been diverging from the other major averages:

I've circled the price action of the past three weeks and contrasted it with the S&P 500 in the bottom panel (blue arrow).  The transports have been correcting mainly because of dislocations surrounding coal shipments in the economy.  In any case, in spite of the divergence, the Dow closed above 13,000 and the S&P rose to a post crash high today.

This market's going higher!