5 replies to this topic

[Russ]

thought that these charts deserve their own post, one that affirms that dow theory has some validity.
*See below charts for theory.

Several instances can be seen on the long chart - of the dow transports (green line) and dow industrials compared - where the transports peaked first, the dot com era bull market being the most dramatic. The evidence is clearly there, I don't understand how anyone can deny it.

The most recent action as can be seen better on the shorter time frame chart shows the transports are now lagging the industrials so based on theory the industrials should peak soon. The transports should finish their lagging rally by November 5th +/-day.


http://bigcharts.mar...&mocktick=1.png
http://bigcharts.mar...&mocktick=1.png

The theory says the transports go down first because they are on the frontline of delivery to the retailers etc. When demand starts to slow from consumers then stores don't order as much and the transportation companies get less business. Eventually all this filters back to the manufacturers and the industrial stocks start to go down too.

Edited by Russ, 13 October 2007 - 08:52 AM.

[Affirmed]

I remember watching (I think it was Fast Money) on CNBC the other night. One of the guests whose name escapes me at the moment showed a very interesting chart along the lines you are raising. He included the international shippers into the Transport Average and low and behold that put the transports at a new high. The question raised is could we have a U.S. recession within a Global Expansion? Most of the Dow Transports are domestic companies while the Dow Industrials are made up of mostly Multi-National companies who are benefiting from the global expansion minus any U.S. recession potential. Personally I thought it an interesting perspective. Perhaps that is what has changed here a U.S. index as opposed to a Global Index? Food for thought anyway!

[Russ]

I remember watching (I think it was Fast Money) on CNBC the other night. One of the guests whose name escapes me at the moment showed a very interesting chart along the lines you are raising. He included the international shippers into the Transport Average and low and behold that put the transports at a new high.

The question raised is could we have a U.S. recession within a Global Expansion? Most of the Dow Transports are domestic companies while the Dow Industrials are made up of mostly Multi-National companies who are benefiting from the global expansion minus any U.S. recession potential.

Personally I thought it an interesting perspective. Perhaps that is what has changed here a U.S. index as opposed to a Global Index?

Food for thought anyway!

Interesting, would like to have a look at that chart including international shippers.

[Russ]

Here is a chart showing international shipping as taken from the link below. This index is surging.

http://biz.yahoo.com...82925.html?.v=1

[Affirmed]

[quote name='Russ' date='Oct 13 2007, 11:05 AM' post='321071']
Here is a chart showing international shipping as taken from the link below. This index is surging.

Before I posted I attempted to find the chart on CNBC.com and I couldn't but that chart does say a lot doesn't it?

[Data]

Tankers seem to track the USO etf. The US is stepping up imports of liquified natural gas and unleaded gasoline. If you add all the firms in shipping to the transports, then you have to add all the rest of the truckers, rails, airlines, freight-forwarders, and logistics companies that aren't in the index and you end up with roughly the same result as the Dow transports.