As mentioned in Monday’s report, the recent bottoming of the [short-term] cycle should temporarily take some of the recent selling pressure off the market, and so far it has done that. The fact that this is a pre-holiday week has resulted in the type of low-volume, buoyant environment for equities that is typical in the days preceding Memorial Day.
The Dow Jones Transportation Average (DJTA) is just below its all-time high and is reflecting a healthy trend for the transportation sector. For that matter, the Dow Jones Industrial Average (DJIA) is less than 200 points below its all-time high (although it’s below the 15-day moving average)….
[Excerpted from the May 21 issue of Momentum Strategies Report]