Technical Analysis: Trannies Confirm ... Finally
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The Dow Transports (first chart below) finally followed the Industrials to a new closing high, although we'd argue that Dow Theory still remains on its primary buy signal from mid-2003. Still, it's a positive based on the old theory that products need to move in commerce, so the Industrials and Transports moving up together is a good sign. But the Dow (second chart) is hitting some significant resistance here, with that upper channel line at just above 12,700 on Monday. Support is 12,638 and 12,614. The S&P (third chart) is nearing similar resistance at 1450, and support is 1444, 1441 and 1435. In short, a possible spot for a blue chip pause or pullback. The Nasdaq (fourth chart) remains the laggard, but at least the index isn't turning tail at important resistance. Still, today's "inside day" completely within yesterday's trading range is a sign of hesitance here. Next up is 2481 and 2500-2509, and support is 2471, 2466 and 2452-2459. The 10-year yield (fourth chart) ended down on another volatile day, but the overall trend appears to be up as long as that rising channel holds.