Mkts: A note of caution

It is inching up this week.

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Black Friday for equities

Juz that no-one noticed it. LOL

The Dow Jones Transportation Average — one of Wall Street’s favourite barometers of economic activity — has fallen for a record 11 consecutive sessions. Many investors, self included, regard its performance as a predictor of growth because it’s made up of of railroad operators, shipping companies and airlines that ship physical goods around the world. On Thursday, it fell for a record-equalling 10th straight session.

And indices including the S&P 500, Nasdaq Composite and FTSE All World all closed below their 200-day moving averages, seen by traders as long-term support levels.

That’s not all: the strength of dollar despite Fed turning chicken on interest rates shows that the other major economies look sick. And strong US dollar is bad for emerging markets.

The gd news is that S&P 5000 fell every day last week for a cumulative drop of about 2.4%  That would rank as its worst weekly performance since December 21, just before the market bottomed.

 

Another Dow Jones record

US stocks finished higher on Friday — with the Dow Jones Industrial Average chalking up its longest weekly winning streak since 1995

Dow Jones Divergence

A bullish call http://www.cnbc.com/id/49451687. But maybe it’s a bearish signal? When the DJI goes up and DJ Tpt does the other way or flat, it used to be a signal that DJI is toppish.

Dow Jones divergence

Keep an eye out on the DJ transportion index. The rises in oil prices have naturally affected the stocks on this sub index. Now if the DJ main index keeps going up while the transport index keeps weakening, this could be bearish for US equity markets. Traditionally such a divergence has led to a fall in the main DJ Index.