Historically, Markets have seen trouble when the Dow Industrials made new highs unconfirmed by the Transports. Last week’s action in the Trannies now eliminates that concern. What would resurrect it? A pike in energy prices driving the Trannies back down — and leaving a DJTA
double triple top behind.
Note that the trasnsports themselves are not free and of potential headaches. Late last week, Dan Gross noted The mysterious trouble in the trucking industry.
Jim Cramer went even further. Never one to shy from controversy, Cramer stated that the strength in the Economy was "vastly overstated" by actual data releases (GDP, ISM, etc.) He he also stated the Trannies are
running due to collusion amongst the rails and airlines over prices. Even more aggressive,he called the US Anti-Trust Department defunct, implying it has become a toothless tiger. If his bud NY Gov Elliot Spitzer ever becomes President, perhaps we will have anti-Trust enforcement again.
I’ll be very curious to see what Richard Russell’s take on this will be . . .
UPDATE February 5, 2007 10:17am
Here’s a quick chart on the Trannies:
Break Out, or Triple Top?
Dow Theory Seems in Play for Some Bulls
Transportation Average Joins the Industrials At a High; More Gains?
WSJ February 5, 2007; Page C1
Dump Truck: The mysterious trouble in the trucking industry.
By Daniel Gross
Friday, Feb. 2, 2007, at 3:29 PM ET