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Mixed signals Tuesday. On the negative side, Dow Transports sold off sharply, hitting a 10-day low with the S&P sitting at new highs. Below is every instance since 2000 when Dow Transports closed at a 10-day low with the S&P at a 5-day high. Short-term moves tended to be choppy, but when a larger move did develop it was usually to the downside (0.5% moves were 2-12)…

SPX 5-day High, Dow Transports 10-day Low (first time in ten days)
05/21/24… SPX ???
01/12/24… SPX -0.9% two sessions later
11/18/21… SPX -0.5% two sessions later
06/10/21… SPX +0.4% two sessions later
01/25/21… SPX -2.7% two sessions later
04/29/19… SPX -0.7% two sessions later
03/01/19… SPX -0.5% two sessions later
01/25/18… SPX +0.5% two sessions later
11/03/17… SPX +0.1% two sessions later
10/16/17… SPX +0.1% two sessions later
07/19/17… SPX -0.1% two sessions later
10/18/16… SPX +0.1% two sessions later
07/29/16… SPX -0.8% two sessions later
04/02/13… SPX -0.7% two sessions later
02/21/12… SPX +0.1% two sessions later
02/08/12… SPX -0.5% two sessions later
12/13/06… SPX +1.0% two sessions later
09/09/05… SPX -0.8% two sessions later
06/09/05… SPX -0.0% two sessions later
02/03/04… SPX -0.7% two sessions later
03/19/02… SPX -1.4% two sessions later
01/24/01… SPX -0.7% two sessions later
08/21/00… SPX +0.4% two sessions later
06/14/00… SPX -0.4% two sessions later

On the positive side, SPX 3-day historical volatility closed at 1.35 Tuesday. Readings below 2.0 tend to precede a rally over the next 2-3 sessions. I’ve included two sets of tables given this occurs with some frequency…

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