Ok, who’s ready for another visual that depicts the extent which everything you were worried about headed into September is suddenly nothing to worry about anymore?
As you’re acutely aware, the last three weeks have been defined by the return of the U.S. reflation narrative – the Trump trade lives – etc. etc.
Yields are up, the dollar’s up, small-caps are back (and “bigly”). Best of all, it appears it’s still possible for all of these “Trump trades” to coexist with records on the benchmarks, no small feat considering how concerned everyone was about deteriorating market breadth and the possibility that this was all being held together by tech.
Well, apparently, you can stop worrying about the transports too, because as Bloomberg noted on Friday, “the group has risen for eight days in a row … a relief to adherents to the Dow Theory, an investment approach that stems from observations Charles Dow made a century ago and holds that moves in transportation stocks must be confirmed by industrials, and vice versa, to be sustained.”
So the bulls can go ahead and check one more box on their confirmation bias list.
