What the oldest stock market index is saying now
The Dow Transports are unusually weak, and a well-known investing-newsletter editor just flashed a ‘sell’ signal
CHAPEL HILL, N.C. (MarketWatch) — The oldest stock market index has also been one of the weakest.
I’m referring to the Dow Jones Transportation Average DJT, +0.37% which was created in 1884, a dozen years before its better known sister, the Dow Jones Industrial Average DJIA, +0.19% Even as the Dow Industrials were holding their own over the past couple weeks, the Dow Transports were breaking down in a big way. (See chart above.)
In intra-day trading Monday, the Transports fell below the index’s August low. And even after Tuesday’s big bounce for the broader market, the Dow Transports are only 1.1% higher than their August closing low.
The Transports’ weakness has bearish implications for at least two reasons. The first is that the transportation sector is a leading indicator of economic downturns.
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