LIVE MARKETS-Can the Dow Transports help keep the bubbly flowing?

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CAN THE DOW TRANSPORTS HELP KEEP THE BUBBLY FLOWING?

On Monday, the main U.S. indexes shrugged off the U.S. strike on Venezuela and advanced. In fact, the Dow Jones Industrial Average .DJI scored its first record close of 2026.

Monday also marked the final day of the seven-day Santa Claus Rally period (the last five trading days of the old year, and the first two trading days of the new year). Despite Monday's strength, the final tally for the S&P 500's rolling seven-day change was -0.11%.

Attention now turns to the January Barometer. Although it's just early in the month, the SPX is up 0.83% so far.

In any event, traders continue to eye recent relative strength shifts.

The S&P 500 equal-weighted index .SPXEW outperformed the cap-weighted benchmark for a second-straight session. And perhaps not surprisingly, with this, Value .IVX outperformed Growth .IGX for a second-straight day.

Both the equal-weighted S&P 500 index and Value were also among the indexes that notched record closing highs on Monday. Among other indexes that finished at fresh record highs were the NYSE Composite .NYA, S&P 500 Industrials .SPLRCI, S&P 500 Financials .SPSY, and the S&P 500 Banks Index .SPXBK.

Both Energy .SPNY and Industrials advanced more than 2% each, while Tech .SPLRCT finished red.

Both small caps .RUT and the Dow Transports .DJT were among the outperformers.

Although not long after recent New Year's Eve celebrations, those who follow Dow Theory might soon be able to break out more champagne.

It's now been 406 calendar days since the last DJT record close on November 25, 2024. Of note, however, the transports have been significantly outperforming recently.

In the final quarter of 2025, the DJT advanced more than 10%, well outpacing the DJI's 3.6% gain, a 2.6% rally in the Nasdaq Composite .IXIC and a 2.3% gain in the benchmark S&P 500 index.

In the early days of 2026, the DJT has continued its outperformance. It ended Monday at 17,737.81, which put it down just 0.09% from its 17,754.38 November 25, 2024, record close.

Based on the Dow Theory, bulls might breathe a little easier if the DJT is finally able to drive to a fresh record close.

(The DJT ended Monday down 2.79% from its 18,246.51 November 2, 2021 record intraday high.)

(Terence Gabriel)

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