Investors that rely upon the Dow theory have been signaling the stock market alarm over the last several months. For a while, the Dow Jones Industrial Average (NYSEARCA:DIA) has continued to set new all-time highs as recently as May, the Dow Jones Transportation Average has fallen into an accelerating decline since last November. According to the Dow theory, such a divergence is an early warning signal that a broader market reversal is likely to soon follow. For those who have followed my articles on Seeking Alpha over time, I have no shortage of reasons why investors should be concerned about the longer-term stock market outlook. But the recent performance of the Dow transports is not among them. While conditions among the transports could certainly deteriorate further from here, such concerns remain overblown to this point.
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