Trouble in the Transports
The weakness in the transportation index is troubling from a technical perspective. The market has been hitting on all cylinders recently with the notable exception of the transportation sector. The transportation names have seen a sharp drop off in comparative relative strength vs. the S&P 500 as FedEx (FDX) and Norfolk Southern (NSC) badly missed earnings estimates. If the index continues to move lower and we see a confirmed violation of the uptrend channel it would not bode well for the current broad based market rally. We would have to see a reversal in the group and a break of the correctional downtrend line started in 2011 to put the sector back on track and confirm the broader market strength.
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