Below we highlight the performance of the Dow Jones Industrial Average vs the Dow Jones Transportation Average during the '02-'07 bull market, along with their performance since the DJIA peaked on October 9, 2007. As shown, the Transports have outperformed during both periods, even though they fell off significantly towards the end of the DJIA's run to new highs last October. Many look at the Transports as a leading indicator for the market, and the fall that occurred late last year is often cited as a clue that the market was headed lower (even though there are numerous periods where the trend hasn't worked in recent years). The recent outperformance in the Transports is puzzling because oil prices are so high, but it seems that investors are playing the foreign revenues game and therefore like them because they don't have anything to do with Financials. At any rate, Dow Theorists are probably happy.
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