thursday trading, page-33

This is a quick follow-up to explain why the $INDU:$TRAN Ratio chart is of great importance.

The oldest and most venerated Technical Analysis "system" is Dow Theory. There are several parts to Dow Theory but one central idea is that the Dow Industrials and Dow Transports must be in sync for a trend to continue.

"The two averages should be moving in the same direction. When the performance of the averages diverge, it is a warning that change is in the air." (See Wikipedia: http://en.wikipedia.org/wiki/Dow_Theory)

The reversal upwards in the ratio chart $INDU:$TRAN suggests very strongly that change is in the air.

Good luck
Red