iShares Dow Jones Transport Avg May Be Best Short If This Is True

The iShares Dow Jones Transport. Avg. (NYSEARCA:IYT) has continue to rally to new all-time highs in recent days. Even today, with the market under pressure, transports are higher. Why? Simply put, lower oil prices will drive earnings. Oil and gas are one of the biggest costs the transportation companies have. As the price of oil and gas drop, earnings should move substantially higher.

The idea that the transports will have amazing earnings is based on one assumption. The assumption is that the drop in oil is due to massive production and not a slowing global demand. Should the crude oil collapse be based on dropping demand, once discovered, the iShares Dow Jones Transport. Avg. (NYSEARCA:IYT) will collapse and fast. Based on recent issues in China, South America and Europe, it is very possible this is the case. Food for thought and potentially a great shorting opportunity on the iShares Dow Jones Transportation ETF.


Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com