According to leading indicators, share prices are still likely to fall intermittently. Small-cap stocks and transportation stocks continue to fall below the support level, and the market is still far from being oversold. Gina Martin Adams, chief stock market strategist for industry research, wrote that he still believes that the worst-case scenario could be a repeat of 2011, when the market has to deal with peak economic growth and volatile inflation.
Dow JonesThe transport index confirms signals from commodity prices and profits that economic growth will peak this summer and that stocks will need to adapt to a longer-term slowdown in the coming weeks. The divergence between the Dow Jones Industrial average and the Dow Jones Transportation Index continued until last week, and the continued decline of the transport sector bodes ill for industrial stocks in the near term.