Dow Jones: We're pretty well there, lingering around the 4-year highs of 13,600.
Transportations: 5200 is a major point of resistance.
Intuitively, I can see that the reason the Dow isn't shooting higher just yet is because the transports, just as I said about a month ago, are playing catch-up. In other words, I believe we are entering the beginning stages of a new market cycle. It remains to be seen if the transportation index will continue to rise past resistance, or bounce back down to new lows. I am still buying the dips, but am focusing on severely beaten down stocks (some with high short interest), but especially ones that have seen strong insider buying (over $150k), and strong signs of medium and long-term profitability despite unusually poor current sentiment.
What this means is I'm not 100% confident in the bull trend, because of the transportation weakness, so I'm focusing on value and dividend aristocrat companies. But I am confident enough to stay defensive and remain invested.
You see, this analysis is NOT for day traders. Rather, this is for long-term investors looking for entry points into and out of the market, ideally during periods of undervaluation and especially ahead of major bull and bear markets.
Stay Sharp
R
