Matthew W Ford
|
Matthew W Ford
|
|
|
The Dow Jones Transportation Index (Updated 09/05/2007 11:30 AM)MGT 307 We discussed the Dow Jones Transportation Index in class. A 4+ year chart of the index appears below. Since financial markets are forward looking mechanisms (i.e., people are betting money on what happens ahead rather than what's happening now or in the past), gauging the strength of the DJTI provides a forecast of sorts about future economic strength. Why? Strong economies require lots of stuff to be moved around. If market participants cool on the prospects of the 'Trannies', it may be because they see economic weakness ahead. Note that the current 4750ish level places the index right on long term support. Technically speaking, the index should either bounce off this uptrend line or 'break down' underneath it. It merits watching. btw, here are the stocks that are included in the DJTI,
Chart courtesy of StockCharts.com |
|
|
