Again, all anyone on Wall Street could take about was the strength of the recent rally – and the very positive moves made on Tuesday
The Dow closed above 13,000 for the first time since May 2008 on Tuesday and the S&P 500 also hit a milestone; it closed above 1,370, its May 2011 intraday high.
With the market trading at what seems like lofty levels, what should you expect?
“I don’t believe the market gives you this much of an opportunity to sell the highs,” says Guy Adami. “I think there’s probably another 50-S&P handles on this rally.”
However, that doesn’t mean Adami is blindly bullish; he’s not. He’s concerned by the action in the Transports. According to Dow theory gains in the industrial index should be confirmed by similar gains in the transport index.
“In other words, – if the DJIA hits multi-year highs the Transports need to do the same,” explains Dennis Gartman.
And that’s not happening.
“The transports are definitely not saying the rally should continue – they’re warning about something,” adds Adami.
“You can’t shrug that off,” adds Keith McCullough. He goes on to say the top in a market is a process not a point. “Once we get through month’s end – then I think we learn what the downside is.”