The ECB, after threatening to do whatever it takes, does nothing. Bernanke sat on his hands yesterday, Knight Capital blows itself up with “fat finger” trades, and the market trades lower.

If it wasn’t already glaringly obvious, trading short time frames, viz. noise, is difficult. Of course we all try it. A longer term methodology, not the one that I actually use, but one that I have looked at, viz. Dow Theory, has an interesting take today.

Which is taking one component of the “Transports” truckers, out of the aggregate of transports, rails, air and anything else that constitutes transport, which is used to confirm/reject the Industrials in the analysis. Take the “rails” data which contradicts the truckers data, and, you see the benefits of combining the transports into an aggregate chart.

Essentially then, Truckers have already broken recent support, while the $TRAN still holds above that area. The whole idea of Dow Theory, is to use the chart in aggregate, not to start examining individual components. Transport to the industrials, back in the day would indicate supply of raw material in, supply of products out, without actually getting into the fundamentals or economics, a lazy man approach, but as effective as anything else.

As it stands, there is/was no confirmation from the transports, to the industrials, that a breakout higher was particularly imminent. Remember back in time, the Russell call of a new Bull market based on Dow Theory? This is not a science, this is an art.