Dow Transports Slip Into Correction, May Signal More Selling Pressure

Recent bouts of sharp declines in both the Dow Transportation Average and Dow Jones Industrial Average sent both indexes well into correction territory, triggering one of the oldest 'sell' signals. The Dow Transportation Average entered correction territory on Thursday, falling more than 10% below its December 29, 2014 peak. A correction is considered to be a fall of 10% or more from a recent peak. The Dow Jones Industrial Average fell into correction territory on Friday. The Dow transports, which consists of 20 companies ranging from airlines to shipping firms, is seen as a barometer of the health of the overall economy. When both indexes reach their correction lows simultaneously, according to so-called Dow theorist, more selling pressure follows in wider markets.