One of the fundamental principles of the “Dow theory” is that in a “healthy” bull market, the Dow Jones industrial and transport indices move synchronously and show new highs together. If there is a discrepancy, this becomes a cause for concern. Important: not a sell signal (since the discrepancy may disappear), but, for example, a reason to tighten stops in order to protect capital in case of a downward reversal. Now for the first time in a long time, this is precisely the situation — the graph above clearly shows that while the Dow Jones industrial index is trading at a historic maximum, the transport one is far behind. If it continues to weaken and leaves the triangular consolidation down, in our opinion, this will greatly increase the likelihood of a significant correction in DJ Industrial and, therefore, in the entire US stock market.