Since mid-August, the S&P 500 Index was down approximately 3% to mid-September, but has recovered about 1.3% to Friday's close. The market seems to be having difficulty finding direction, trading mostly sideways since mid-July, as can be seen in the below chart that includes the Transport index as well.
As I noted in a post in early September, transports began outperforming the S&P 500 Index at that time, after trailing the broader market for most of the second quarter. When the transports begin to lag the broader market, there is some belief that this is potentially a precursor to a weakening economy that leads to a decline in the S&P 500 Index. As the above chart shows, though, transports appear to be in decent shape, potentially pulling the S&P 500 up with it on improving economic fundamentals.
A part of what seems to be occurring in the broader market is…