Transports drop: 12% in 16 days
For some reason, analysts have been ignoring (or simply missing) the dramatic collapse of the Transportation Average. (Transports move the goods and the people) From a July 3 peak of 4974, Transports today closed at 4364, a loss of 610 points or a shocking 12.2% in a period of only 16 trading sessions.
What could the Transport semi-crash be telling us? In my opinion -- it's indicating a general slowdown in the economy. But the rapidity and ruthlessness of the Transport smash has me thinking that the economic contraction could hit sooner than most people expect.
Remember, this is not a 12.2% drop in a single stocks, this is a 12.2% drop in a stock average -- extraordinary. Of course, the big question now is whether the Transports will drag the Industrial Average down with it.
Could the Transports, home-building stocks and the retail stocks be telling the real story?
What could the Transport semi-crash be telling us? In my opinion -- it's indicating a general slowdown in the economy. But the rapidity and ruthlessness of the Transport smash has me thinking that the economic contraction could hit sooner than most people expect.
Remember, this is not a 12.2% drop in a single stocks, this is a 12.2% drop in a stock average -- extraordinary. Of course, the big question now is whether the Transports will drag the Industrial Average down with it.
Could the Transports, home-building stocks and the retail stocks be telling the real story?
posted by Dr. Jeff Lazarus MD at 7:45 PM
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