DOW Transporations
Transport...
Dow Jones Transport Index is advancing strongly: a bullish sign for the economy.
DOW Transporations...
Transport
Fedex reversed below its rising trendline to warn of slowing momentum, while Twiggs Money Flow (21-day) reversal below zero indicates selling pressure. Failure of support at 90 would signal a correction. Recovery above 96, however, would signal a fresh primary advance. UPS remains in positive territory, favoring a recovery.
DOW Transporations...
Transport
Fedex found support at 90 and is testing resistance at the 2010 high of 96. Breakout would signal a fresh primary advance. UPS remains in positive territory. Both bellwether stocks are positive signs for the recovery.
A leading gauge of the United States transport business, the Dow Jones Transportation Average.
Without a healthy economy, manufacturers don't ship, and consumers don't order, so in recent years the Dow Transports have become a key bellwether of economic climate, far beyond the narrow sector it tracks.
The oldest index in use (since 1884 and then principally railroad companies), the DJTA tracks 20 leading companies that constitute the cream of the industry in rail, air and ground transportation. Their principal modes are highly connected to transportation in the sea lanes as well.
There are several good reasons for this surge in the Dow Transports. China trade continues to dominate, and that means transportation of containers to the U.S. Of the 17,000 shipping containers that come into the country each day, the majority are Chinese exports. They are shipped, trucked and passed through intermediary facilities all over the country.
This business also includes major expenses and profits for distribution centers set up in China by U.S. third-party companies like UPS and FedEx, among others. The health of these U.S.-based companies is being supported by increased global trade.
A second major cause of this stock surge comes from the 3.2% increase in U.S. productivity, which translates into greater transportation demand to move goods as materials, parts and finished products.
The entire supply chain benefits from increased productivity, since at each stage of a product's transportation life cycle, there are complex transits involved, and warehouses, terminals and distribution centers are kept busy sorting and redistributing.
When this productivity is coupled with the good figures, a clear demand is in place. Retailing is where the demand for goods is initiated, and strong sales call for more orders of more goods. In a domino effect, strong product orders can, in time, lead to even more shipping business through returns, refurbishing and replacement.
A third factor for the increase in the transport index is the track record of the companies that make up the average.
The following companies comprise the DJTA: Alexander & Baldwin , AMR , Burlington Northern Santa Fe, C.H. Robinson Worldwide , CNF, Expediters International , FedEx, GATX, JB Hunt Transport Services ,Jet Blue Airways ,Landstar Systems ,Norfolk Southern , Overseas Shipholding Group ,Ryder Systems ,Southwest Airlines ,Union Pacific , United Parcel Service and Yellow Roadway .
Dow Jones 20 Transportation
DOW Transporations...
Transport
Fedex broke through resistance at the 2010 high of 96, signaling a fresh primary advance. UPS and Fedex advancing together predict stronger economic growth.
DOW Transporations...
Transport
Fedex fell sharply after a false breakout above 96. Recovery above 90 would be reassuring, while follow-through would signal a correction — and suggest that economic activity is weakening.
DOW Transporations...
Transport
Fedex commenced a primary down-trend after breaking support at 90; follow-through below 87 would strengthen the signal. Failure of support on the broader Dow Transport index would add further confirmation — warning of a decline in economic activity, largely as a result of the spike in oil prices.
Transport...
The Dow Transport index established a base, completing a small double-bottom, and breakout above 5300 would signal a fresh advance. Bellwether stock Fedex has been hit by higher oil prices, but there is no cause for alarm unless we see a fall below the recent ($85) support level.
Connect the dots... (from Jan high).