Why? Because while the Dow has failed to hit a new high, the transportation average has behaved in-kind. The rub is that in the short term, both are inching on a downward slope, and the relationship is exhibiting some classic signs of a looming correction, albeit on a smaller scale. I expect a 3-5% correction in the dow, and a 5-7% correction in the transportation averages, which would allow both to hit a new intermediate low below , which would then signal us back off on the major trend, inching up.
On the other hand, if there is some really good data out tomorrow and the Dow surges to a new high, I will be watching for confirmation in the transportation average. Until that happens, I am staying nimble and non-committal.
