by Greg Guenthner
Daily Reckoning
Many folks think the Dow is the most worthless major index on the planet.
Why? Because it’s price weighted. So a big move by a higher-priced component can easily sway it for the day. And it only contains 30 stocks. Can the fate of the entire stock market really rest on 30 mega-caps? I get it.
But forget about that for now. Today you’re going to see just how valuable the Dow Jones Industrials and its cousin the Dow Transports can be. When it comes to measuring market moods, they’ve got a proven record of accuracy. You’ll also see how one of these averages is creeping toward an important inflection point. And how it could soon trigger another profitable trade for us.
First let’s see how these two averages work together…