“If traders believe in the Dow Theory and its ‘train’ of technical thought which holds confirmation between the industrials (DIA) and transports (IYT) as sacrosanct, bears may be looking to climb on board the market,” writes Chris Tyler for Optionetics. “Despite the DIA setting fresh multi-year highs, the IYT has gone from attempting to break out of a neutral, but bearishly-positioned symmetrical triangle to a quick test of pattern support on Thursday.”
“The Dow Transports surged to resistance last week and plunged to support this week,” says Arthur Hill at StockCharts.
The Dow Jones Transportation Average has been stuck in a trading range since mid-June, and a break below support would be clearly bearish for the sector and negative for Dow Theory, he added.
Dow Jones Transportation Average
