Dow Jones Transportation index collects major 20 transportation companies. In the graph we see that after the peak of end in 2014, the index has not been back to the highest levels. Right now the index seems to have lost strength in the long-term uptrend. As Dow theory say, this index must have the same trend of the Dow Jones Industrial. This is because the major industrial companies, in the presence of a strong economy, if they produce goods and products, they must be transported and distributed in the various markets.
In the chart below there is the overlap of both Dow indexes from the end of 2014. We note that Dow Jones Transportation has a weaker trend of the Dow Industrial with an actual gap of about 8%. This difference should decrease in the long run. The prices of industrial companies need to be confirmed by transportation companies otherwise the economy can have some problems still not evident.
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