At the close today the Dow Jones Transportation Average (DJTA) finally made a new secondary low. The last secondary low for the transports was in June of 2012.The completion of the new low is a result of a decline that retraced about 40% of the rally from June 2012 to December 2014, that was subsequently followed by a three week rally that has retraced about 40% of the decline from the last secondary high made in late December.

The Dow Jones Industrial Average (DJIA) needs to break above 16,655 (without falling below the August low) to make the August low a new secondary low. Another 50 points tomorrow would do it. If that low is made we’ll have much more clarity on the long term trend of the market…or if not clarity at least we’ll have a good road map to follow.

After new secondary lows are created in both indexes all we have to do is watch to see if both averages make it to new highs or if both of them break their August lows. New highs will confirm the long term trend as bullish once again. A break of the August lows will signal the long term trend is now down. A break down would end the bull market that was confirmed by Dow Theory in the summer of 2009. It would indicate that we are now in a long term bear market. In the mean time, the long term trend is still intact, but on a weak footing.

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