There are two possible trendlines in today's action. The first is labeled trendline A -- it is the upper trendline in the chart. If this is the correct trendline the the market sold-off at the end of the day breaking trend. However, the lower trendline (trendline B) may be correct, in which case we closed right on top of the line.
Tomorrow's action will tell us which trend line is important to the market.
Notice we have a three day uptrend in place right now. This charts makes me think that trendline B from above is the correct trendline for this market.
Today's transport's action did not confirm today's advance. That's not a good sign. Remember the basic underpinning of Dow theory. If business is expanding, it will need to transport new stuff to new places. That makes transportation stocks attractive. But if transportation isn't rising, traders don't think that transportation earnings will increase making the stocks less attractive. But transportation earnings drop in a declining economy.
While the daily action shows three days of advances, those advances have occurred on continually decreasing volume. That means traders are progressively less excited about this 3-day run-up. Combine that with the transports sell-off today and you have a very unconvincing market.
