In my estimation, if IYT:DIA begins to strengthen from here, we will see new intra-year highs for the S&P 500 and
. On the other hand, if IYT:DIA served up additional weakness in transports, global recession fears would likely trump recent psychological feel-goods like 1400 on the S&P 500 and 13000 on the Dow.
A sign of greater relative strength in IYT would likely indicate additional broader market gains to come, whereas more relative weakness in IYT would likely precede broader market selloffs.
It follows that, in spite of tepid volatility and low volume, investors may be sitting atop a pivotal point for the direction of the Dow.
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