Since 1929, the Dow Jones Industrial Average has rarely ever been so close to a 52-week high while the Dow Transports AND Dow Utilities were so close to a 6-month low.

A few weeks ago, we ran a series on divergences in an attempt to provide some statistical evidence to the debate on this ambiguous topic. Given the attention paid to the Dow Theory (i.e., the relationship between the Dow Industrials [DJIA] and the Dow Transports [DJT]), several of the posts were focused on it, as well as the interplay with the Dow Utilities. The general takeaway from the series was the same thought we had going into the studies: divergences are present at a lot of major market tops, but also at a lot of other times as well. That is, divergences are like most everything else – at times, phenomenal signals but unreliable.

Of course, the impetus behind the timing of the series on divergences was the presence of several of them at the time. And while many of them are still present today, we have resisted covering them further for a couple reasons. For one, we were tired of posting research on divergences. Secondly, one of the conclusions we reached was that, even in the cases where they eventually prove meaningful, divergences can persist for a long time before any repercussions. Therefore, while there continue to be divergences, we have found nothing new to report regarding them. Until now, that is.

While we don't want to get lured too far down the divergence road again, there is one more angle to the divergences among the Dow indices that has recently caught our attention. Over the past few weeks, the Dow Jones Industrial Average has traded at or very close to its 52-week high. At the same time, the Dow Transports AND Dow Utilities have traded at or near 6-month lows.

Specifically,  on June 10, the DJIA was less than 2% away from its 52-week high while the DJT and DJU were less than 1% away from their 6-month lows. That was just the 3rd day in history (since 1929) that we can find such circumstances – September 19, 1994 and December 9, 1999 were the others.