One of the key tenets of Dow Theory is that the primary trend is confirmed when the Industrials and Transports make new highs. Both are close to achieving this, but not quite there yet. The Industrials slowly grinding higher. But it is the Transports that show a lot of promise. Just two weeks ago they broke the neckline of an Inverse Head and Shoulders pattern.
This pattern gives a price objective to at least 230 on the Transport ETF, $IYT. That would be a new all-time high. And there are only a couple of hiccups in the way of getting there. The first is the December 3rd high. At just under 200 this level would signal a higher high and continuation of the path higher.
The next is the September 2018 plateau, the all-time high. It is less than 8% away and a move over it would carry great meaning. If it happens it will likely not be the first index to make new all-time highs. But the historical implication will keep price watchers glued to the screen to see it happen, long after the Nasdaq 100 and S&P 500 have achieved the same territory.
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