Warning Signs: Leading Transports Continue To Lag

Over the last few days, the strongest sector is starting to lag. What sector is this? The Transports iShares Dow Jones Transport. Avg. (NYSEARCA:IYT). This sector has taken the markets higher and never looked back, until now. As the leader, the weakness starting to show up recently should be noted. It very likely speaks to weakness on the horizon for the whole market. Look at airline stocks like United Continental Holdings Inc (NYSE:UAL). The stock is down over 4.5% today alone. This is a monster drop and is seen in a majority of other airline stocks. The weakness in the transports is very much like the weakness that was seen in the Biotech Index just months ago prior to its 25% correction. This drop in the biotech index took the NASDAQ down almost 10%. If transports remain weak, use it as a leading indicator to signal a drop in the S&P 500 and the Dow Jones Industrial Average.


Gareth Soloway
InTheMoneyStocks.com