Dow Jones Industrial Average Vs. Dow Jones Transportation Average

A quick comparison of two Dow Jones indices, which I’ve done before, should tell us whether or not the Fed’s stimulus is trickling down through the market evenly.

This comparison is the Dow Jones Industrial Average (DJIA) versus the Dow Jones Transportation Average (DJTA).

In this environment of Fed-fueled stimulus, the Industrial Average has been strong, making the higher highs and higher lows characteristic of an uptrend. In March of this year, the DJIA broke above its 2011 high. Then, after a pullback in May and early June, the Industrial marched higher… again breaking above its previous peak.

See image larger

But a look at the Transportation Average tells a different story.

Its 2011 high was 5,627 and, unlike the DJIA, this level has yet to be broken. The Transportation Average’s 2012 high is lower than the 2011 high. And worse still, the current price is well below this year’s peak price.

See image larger

Simply put: the Industrial Average is strong and the Transportation Average is weak.

One possible explanation: the Fed’s stimulus has done little to lower energy prices – a major cost for transportation companies.

It’s also likely the Transportation Average is signaling the global slowdown we’ve been warning about for years now.

Either way – these two market indices should be moving in sync, and they’re not. Be careful.

If you haven’t done so already read the Survive & Prosper issue on “Our Free Market Economic System Works”

 

 

How CEOs are Earning 335x MORE Than Their Own Employees

What if I told you up to 95% of companies currently trading on the stock market today are essentially stealing money right out of your pocket!? This includes some of the biggest names in the corporate world… companies that trade millions of shares a day, who you might be invested in right now!

Discover just how far the deceit on Wall Street goes and how you can still uncover many lucrative opportunities in the stock market today, in our new infographic: How CEOs are Earning 335x MORE Than Their Own Employees

LEARN MORE
Categories: Economy

About Author

Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.