Dow Theory - divergence between industrials and transports

One of the key principles of Dow Theory is that indices must confirm each other. Specifically, upward movement in industrials needs to be confirmed by transports.

For a trend to be valid, both the DJIA and DJTA should move in the same direction. If both indices are making new highs or new lows simultaneously, it confirms the overall trend (bullish or bearish). Divergence between these indices raises concerns about the sustainability of market trends and potential economic weaknesses.