My Wednesday message showed the Dow Industrials and Transports testing their summer highs. The bars on top of Chart 7 show that the Dow Transports have hit new highs (led by rails and truckers). The Dow Industrials, however, are still testing their July peak. The Industrials need to hit a new high to confirm the upside breakout in the Transports. Odds for an upside breakout appear pretty good however. It's usually a good sign for the industrials when the more economically-sensitive transports are leading it higher. The bars below Chart 8 show the Dow Utilities ending the week at a two-month high. That means that all three Dow Averages are rising together, which is normally a good sign.
About the author:John Murphy is the Chief Technical Analyst at StockCharts.com, a renowned author in the investment field and a former technical analyst for CNBC, and is considered the father of inter-market technical analysis. With over 40 years of market experience, he is the author of numerous popular works including “Technical Analysis of the Financial Markets” and “Trading with Intermarket Analysis”. Before joining StockCharts, John was the technical analyst for CNBC-TV for seven years on the popular show Tech Talk, and has authored three best-selling books on the subject: Technical Analysis of the Financial Markets, Trading with Intermarket Analysis and The Visual Investor.