Written by Gary

New historic highs set again this afternoon by the DOW and SP500 but slipped to flat status by the 4 pm closing bell. Anemic volume plague the averages for most of the afternoon as concerned investors would rather sit on their hands and see what happens next.

Todays S&P 500 Chart

The Federal Reserve’s plan to raise interest rates this year, forged over months of strong jobs growth and a seemingly durable expansion, now faces an economy that no longer follows the script and may push the “liftoff” far into the future.

Update: When does the market break down?

There are a lot of ol’ timers out there who have their programs set for “not going against the DOW Theory”. That means, if the Dow Transports and the Dow Industrials fail to the downside, sell programs will kick in.

The Dow Theory says that the Dow Jones Transports and Industrials must be in sync with each other. For that reason, we will look at the Dow Transportation Index today in order to see what it is doing.

The chart is below and when you look at it you can see that it has been in a trading range since last October.

Currently, the DJT is still inside its trading range and holding. It has been trying to consolidate but it is has been in the bottom half of the trading range.

Note the red resistance line since April 23rd. … the DJT has been in a down trend since then and it needs to break above the red resistance line.

So, make a effort to keep an eye on the Dow Transportation Index.

Today.

The Market in Perspective

Here are the headlines moving the markets.
	Takata recalling 34 mln vehicles in U.S. with defective air bags WASHINGTON/DETROIT (Reuters) – Japanese air bag manufacturer Takata Corp is recalling nearly 34 million vehicles due to problems with air bag inflators, creating the largest automotive recall in American history, U.S. safety regulators said on Tuesday.
	Palladium Revs Its Engine The metal, usually overshadowed by gold, silver and platinum, is commanding more attention. Healthy sales of autos in the U.S. and China are expected to keep demand robust,
	ECB to Move Up Stimulus Plans The euro dived and European stocks and bonds surged after ECB board member BenoÃƒÂ®t CoeurÃƒÂ© said the central bank would conduct planned bond purchases earlier in the summer to make up for lower liquidity later.
	U.S. Housing Starts Accelerated in April The Commerce Department reported that home construction rose 20.2 percent over March, to an annual rate of 1.135 million.
	Economy’s weak spell puts Fed at crossroads over liftoff plans WASHINGTON (Reuters) – The Federal Reserve’s plan to raise interest rates this year, forged over months of strong jobs growth and a seemingly durable expansion, now faces an economy that no longer follows the script and may push the “liftoff” far into the future.
	Judge certifies class action over J.C. Penney phantom discounts (Reuters) – A federal judge certified a class-action lawsuit that accuses J.C. Penney Company Inc of marking up retail prices on apparel and accessories to trick shoppers into believing they were getting big discounts when the items were advertised on sale.
	Off-price retailers strike gold from West Coast slowdown (Reuters) – Not every U.S. retailer has cause to complain about the West Coast port disruptions. For those focused more on price than the latest fashion, the delivery backlog caused by the slowdown could be a treasure trove.
	Exclusive: GE says to lose Angola locomotive deal if Ex-Im Bank closes WASHINGTON (Reuters) – General Electric Co would lose a $350-million deal to build locomotives for Angola, and perhaps billions of dollars more in future export opportunities, if Congress closes the U.S. Export-Import Bank, a senior GE executive told Reuters.
	Takata Recalls Over Airbag Defects Grow to 34 Million Takata, the Japanese supplier, and safety regulators nearly doubled the number of vehicles that need to be recalled in the United States.
	Robust U.S. housing data offers hope for second quarter growth WASHINGTON (Reuters) – U.S. housing starts jumped to their highest level in nearly 7-1/2 years in April and building permits soared, hopeful signs for an economy that is struggling to regain strong momentum after a dismal first quarter.
	Changing the Channel on Apple TV Unplugging plans for a television set shows discipline amid fevered speculation around Apple.
	Blowing the Froth Off of Tech Earnings The widening gap between reported and pro forma earnings at companies like Facebook, Twitter and LinkedIn adds weight to fears of a new tech bubble.
	Wal-Mart sales miss estimates as shoppers save more, spend less (Reuters) – Wal-Mart Stores Inc on Tuesday joined the list of U.S. retailers reporting disappointing quarterly results, saying consumers’ pocketing tax refunds and savings from cheaper gasoline had dented its sales growth.
	Merck Could Struggle to Hit Health Care Heights The German company is pinning its hopes on successfully developing a new cancer treatment in alliance with Pfizer. That puts it in a very competitive field.
	Don’t Bet the House on Home-Improvement Stocks Ahead of the Tape: Lowe’s is flavor of the month in a home-improvement retailer taste test, but the sector looks pricey.
	Stocks mixed as Wall St. eyes healthier economy (Reuters) – The S&P 500 wavered on Tuesday afternoon as Wall Street digested U.S. housing data that some saw as hopeful for an economy struggling to grow.
	Statistical Puzzle: Dueling Views on the First-Quarter Slump Economists disagree about the accuracy of arcane statistical measurements used to offset seasonal slowdowns.
	Carl Icahn and son say Apple will still introduce TV, car: CNBC (Reuters) – Billionaire activist investor Carl Icahn and Brett Icahn, his son and portfolio manager, on Tuesday stuck to their views that Apple Inc would introduce a television set and a car.
	J.P. Morgan Holders Back Compensation Plans J.P. Morgan shareholders voted in favor of the company’s compensation plans at its annual shareholder meeting, though the tally was the lowest since 2011.
	Los Angeles Expected to Raise Minimum Wage to $15 an Hour A vote to raise the minimum wage by the Los Angeles City Council is expected to pass Tuesday, potentially setting off a wave of similar increases across Southern California.
	The Real Reason Draghi Is Front-Loading QÃ¢â€šÂ¬ (In 1 ‘Disappointing’ Chart) When US Macro data started to crumble after QE3 ended last year, and with it US equities, The Fed unleashed Jim Bullard to suggest that QE4 was possible if things deteriorated… and in that moment, everything broke. The last few months have seen expectations of a European recovery dashed as macro data has disappointed greatly – now weaker on the year. So what is Draghi to do? Easy – Fed playbook: unleash Benoit Coeure to suggest moar QE sooner and maintain the illusion of future success in stock prices (even as data collapses)… * * * Stocks are up because… fundamentals.