The Bull Is Back?
The Dow Transportation Index is at an all-time high . Last Friday, the Dow Industrial Average "confirmed" the action of the Transports by besting its most recent highest high from October of last year . At this point both the Dow and the Transports are overbought . The technical indicators suggest at least a modest consolidation is in order . But, if you follow Dow Theory as I do, this is a big buy signal. I won't jump in quite yet, given the extended nature of the technicals ( RSI is at a rather stressed 70 and the Stochastics are at an acute 98 - those numbers always break down, markets go up with those numbers, they come down with those numbers), but the Dow and the Transports are telling us they see no problems ahead . Unless we get a severe correction to work-off the overbought condition , it looks like it is a good time to buy on any pullbacks. In other words, forget the lackluster nature of the economy , the markets say things are looking up for the