Dow Transports in Correction Territory; Other Major Stock Indexes Not Yet Negative

NEW YORK (TheStreet) -- Given negative technical indicators for the Dow Jones Transportation Average, there is no longer a bull market for stocks, although the technical chart patterns are not yet negative for the other four major averages.

To signal a potential stock market correction, all five major averages must end the month on Friday below their key weekly moving averages with technical momentum declining below the overbought threshold of 80.00.

Here are the updated profiles for the five major averages followed by the daily and weekly charts for the Dow Transports.

The Dow Jones Industrial Average closed at 18,041.54 on Tuesday, up 1.2% year to date and 1.7% below its all-time intraday high of 18,351.36 set on May 19. Tuesday's close was below the key weekly moving average of 18,080, but the weekly momentum reading is projected to be 80.51, which is above the overbought threshold of 80.00. Additional weakness over the next three days is required to pull momentum below 80.00, which would result in a negative weekly chart.

The Standards & Poor's 500 Index closed at 2,104.20 on Tuesday, up 2.2% year to date and 1.4% below its all-time intraday high of 2,134.72 set on May 20. Tuesday's close was below the key weekly moving average of 2,105.9, but the weekly momentum reading is projected to be 86.14, which is above the overbought threshold of 80.00. Thus significant additional weakness is required over the next three days to have a negative weekly chart.

The Nasdaq Composite Index closed at 5,032.75 on Tuesday, up 6.3% year to date and 1.7% below its multiyear intraday high of 5,119.83 set on April 27. Tuesday's close was above the key weekly moving average of 5,005. The weekly momentum reading is projected to be 76.90, up from 76.07 on May 22. If the Nasdaq ends the month on Friday below 5,005, the momentum reading will likely be declining, shifting the Nasdaq's weekly chart to negative.

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