E The Dow Transports: Detecting The Issues

These are the top 10 holdings in the IYT; you can see there is quite a cross-section:

Top 10 Holdings (67.7% of Total Assets)        

Company         Symbol            % Assets

FedEx Corporation  FDX    13.07

United Parcel Service, Inc.       UPS     7.61

Union Pacific Corporation    UNP    7.24

Kansas City Southern  KSU    6.92

Norfolk Southern Corporation      NSC     6.67

Ryder System, Inc. Common Stock     R          6.28

Landstar System, Inc.  LSTR   5.25

C.H. Robinson Worldwide, Inc.          CHRW 4.90

Alaska Air Group, Inc. Common   ALK    4.89

J.B. Hunt Transport Services       JBHT   4.87

To be fair, the IYT has been in an uptrend since the Reagan years so let's not get too hysterical on this selloff. There is a silver lining even in the IYT nimbus clouds many may have overlooked. Sherlock would be proud.  

In the end, heed the words of Holmes if you want to be ahead of the crowd in understanding the IYT.Holmes advised that "It is a capital mistake to theorize before one has data."  In other words, don't twist facts to suit theories; adjusttheories to suit the facts.

For the time being, I would avoid buying the IYT. It has failed bounces to the 50 DMA and the relative strength is at a multi-year low.

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Disclaimer: This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer ...

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Comments

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Gary Anderson 4 years ago Contributor's comment

If the rest of the market is a bubble as suggested by Harry Dent, perhaps this is a good call. Don't buy the transports!

Vintage Vixen 5 years ago Member's comment

Blair Jensen has an article on TalkMarkets today (Saturday) on this topic, would love to see your reaction!

Marcy Brown 5 years ago Member's comment

Nicely done Dr. Wydra! You've certainly made this issue seem quite elementary!

Wendell Brown 5 years ago Member's comment

I wish you'd drawn clearer inferences between energy and freight as it affects transports. You talk a lot about energy but less about the other consumer discretionary issues and how they impact trucking, delivery services etc.

James Goldstein 5 years ago Member's comment

Good point, do you have any insight to add here? I'd be curious to know. Otherwise, very good read. Thanks for sharing.

Old Time Investor 5 years ago Member's comment

Er, you do know that Sherlock Holmes wasn't a real person, right? So the books about detecting are really about the mind of Arthur Conan Doyle....

Anastasija Janevska 5 years ago Member's comment

Lol, yes I think it's obvious she knows he's a fictional character.