Dow Transports In Danger Of 1st Correction In Nearly 4 Years

The fourth time could be the charm for the Dow Jones Transportation Average , which is in danger of closing Wednesday in correction territory for the first time in nearly four years. A decline of 10% to up to 20% from a significant peak is widely viewed on Wall Street as a correction, while a decline of 20% or more is seen as a bear market. A 10% decline from the Dow transports' Dec. 29 record closing high of 9,217.44 would be 8,295.69. The DJTA traded in correction territory intraday May 29, June 1 and June 9, but recovered to close each of those sessions above the threshold. The DJTA is down 1% at 8268 in afternoon trade. Meanwhile, the Dow Jones Industrial Average is down 0.2%, and is just 2.4% below its May 19 all-time closing high of 18,312.39. The century-old Dow Theory of market analysis suggests the Dow transports and Dow industrials have a symbiotic relationship, and should trend in the same direction. "The underlying fundamentals of the [Dow] theory hold that the industrials make and the transports take," according to S&P Dow Jones Indices. "If the transports aren't taking what the industrials are making, it portends economic weakness and market problems, Dow Theorists maintain."