Everything is hunky-dory. The economy, we are told by President Obama, is improving, housing may have bottomed, consumers are happily consuming again, and on January 11 the Dow hit a new high for the advance.

Commodities — China’s government-planed slowdown is hitting the whole commodity spectrum including the precious metals.

“All’s well that ends well,” wrote Shakespeare, and all does seem to be well, except that we’re only halfway through January and thus we can’t know how the year 2011 is fated to turn out.

As I look over my studies, only two items bother me. The first is the dying US dollar, and I admit that is a rather large worry for me. Everything we own, stocks, bonds, housing, savings, insurance, is denominated in US dollars. If the dollar craps out, the whole foundation of the “US house” gives way. If the dollar dies, our whole way of life dies with it. OK, so you know what I think about the dollar. It simply must not crash (a lot more about this on Friday’s site).

My second area of concern is the D-J Transportation Average. Subscribers know that I have been bothered by the persistent divergence that has greeted so many of the recent market closing. Pioneering Dow Theorist, Robert Rhea wrote that “when the Averages disagree, it’s usually a sign of distribution.

Yesterday the Transportation Average, after many days of divergence, slumped 92.3 points to close at its lowest level since December 31. Industrials declined 12 points in harmony with the plunging Transports. Frankly, I didn’t care for the close. I had a “bad feeling” about the close. On top of that, down-volume yesterday was 89% of up + down volume, barely missing being a 90% panic-type decline.

Hmm, as I write this morning Transports are down another 57 points. Transports chart below, Transport falling out of a “wedge.” Note the volume increase on the Trans. decline.

“Disregard The Amateur Warnings And Ride The Gold Bull,”