As the $RUT is failing to recapture the 200MA yet again and the $SPX continues to diverge high above it I note a barrage of sell side merchants hitting the airwaves assuring the investing public not to worry. Yet trading volumes keep dropping with yesterday reaching the lowest trading volume of the year so somehow they are having trouble convincing the public to keep tossing cash at this market. And that’s a problem for banks of course who derive large chunks of their revenue from trading volume commissions.
Fool me once shame on you, fool me 20 times shame on me I suppose. While we see the corrective action in the $RUT and in some tech the $SPX and the $DJIA keep appearances up. But one index in particular is making a mockery of Janet Yellen’s continued insistence that she sees no bubbles.
And given the sell side merchants’ hyper pitched uniform message on CNBC I thought it would be nice to go on record on exactly where in the cycle they are telling retail to buy. I present the monthly Dow Jones Transportation Index. Go on. Buy right here:
Note of course the historic deviation from the middle Bollinger Band. It’s just an all time record 20% deviation, but hey, the sell side merchants won’t mention this of course: