Despite recent all-time highs for the Dow Jones Industrial Average (DJI), S&P 500 (SPX), and Nasdaq 100 (NDX), the Dow Jones Transportation Average (DJT) has failed to surpass the late 2021 peak (light blue dotted line).
According to Dow Theory, a lack of new highs in both DJI and DJT suggests a lack of confirmation between the two indices. DJT, especially, is expected to lead the way, reflecting the need for transportation for produced goods.
If DJT fails to break through in the short term, caution is advised for potential market pullback risks.
