The Transportation Index and oil are diverging for the first time in a month. This signals exhaustion on the transportation stocks. The key here is to understand that as oil has collapsed in the last month, transportation stocks have soared. An example would be a 1% drop in United States Oil Fund LP (NYSEARCA:USO) would yield a 1% rise in the iShares Dow Jones Transport. Avg. (NYSEARCA:IYT). This connection has now ended today and tells us that the iShares Dow Jones Transport. Avg. should have topped out. Watch the video below
