The Transportation index is flirting with new highs, as is the Dow Jones industrials. If the transportation average hits new highs, and the dow fails to confirm (I'm talking about daily closes), it is a sure sign that we are in for an intermediate correction. If that pattern is repeated in the weekly close, then you can know that the correction will be on the scale of the one that happened late in 2011 when the greek debt crisis finally blew up in investor's faces.
Now, because both indexes are flirting with all time highs, and because the movements are not dramatic, I will venture a guess and say that both indexes will go on to make new highs in the next week and beyond. I could be wrong, but I sense that all of this money printing is going to continue to inflate stocks and corporate balance sheets, especially of the banks, will continue to expand.
Click the picture to enlarge the chart
