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Dow Theory…A theory which says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high, it is accompanied or followed by a similar advance in the other.
Of late the Dow and the Industrial Index’s have been in sync, moving higher together.
The Transportation ETF IYT now finds itself at the top of channel and Fibonacci 161% extension resistance and a small break of support is taking place in IYT!
It is too early to say that a Dow Theory breakdown is taking place, yet one should continue to watch Transports very closely here to see if further weakness continues and sends a negative Dow Theory message!