Transports and Industrials Diverge

By | April 13, 2016

100005.Transportschart

The red line on the chart is the 10 day moving average of the Dow Jones Transportation Average ($TRAN) and the blue line is the 10 day moving average of the Dow Jones Industrial Average ($INDU). In December the transportation average can be seen leading the industrial average lower and then in February it signaled the move higher. This month, however, the transports have begun moving in bearish divergence to the industrials. The question is: do the transports continue their brief leadership role and weigh the industrials down, or will there be a shift in leadership and the transports have to play catch-up.

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