In the article “Dow
Jones Transportation Index Still Diverging From Broader Market; What It Means,”
Mitchell Clark, contributor to Profit
Confidential, reports on the significant divergence that has increased
between the S&P 500 Index and the Dow Jones Transportation Index. According
to Clark, this continued divergence represents
a non-confirmation of the stock market’s most recent rally.
that the Dow Jones Industrials, the S&P 500 Index, and the NASDAQ Composite
are up substantially already this year, and this doesn’t include dividends.
“The divergence became
apparent mid-July, when oil prices recovered from their recent correction,” reports
Clark. But Clark
thinks the divergence is due to more than just higher oil prices; he believes
it’s emblematic of a stock
market that’s losing its momentum.
“It’s a very tough
environment in which to make predictions about the stock market,” says Clark. “There are just too many unknowns out there, and
that’s why so many dividend paying stocks, like those in the Dow Jones
Industrials, have done well this year. All of the uncertainty is making stock
market investors very conservative.”
Clark does believe that corporate balance sheets are
very solid at this time, and stock market valuations are reasonable.
include the fiscal cliff in the U.S.,
the sovereign debt crisis in the eurozone, and geopolitical uncertainty
regarding Syria and Iran,” reports Clark.
corporations have never been better.”
Clark concludes that the divergence between the Dow
Jones Industrials and the Dow Jones Transportation Index is worrisome, and for
the broader market to really advance, transportation stocks will have to
Michael Lombardi, MBA, the lead Profit
Confidential editorial contributor, has just released his most recent
update of Critical Warning Number Six,
a breakthrough video with Lombardi’s current predictions for the U.S. economy,
stock market, U.S. dollar, euro, interest rates and inflation. To see the
video, visit http://www.profitconfidential.com/critical-warning-number-six.
To see the full
article and to learn more about Profit
Confidential, visit www.profitconfidential.com.