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The Dow Jones Transportation Index.

July 24th, 2017

The Dow Jones Transportation Average is an index of 20 transportation stock traded in the United States. Charles Dow created this index in 1884, and it is now more commonly used to confirm the state of the U. S. economy. If transportation stocks are doing well, move goods to be sold, then the economy should be doing good. Also, the Dow Theory is useful in confirming new highs or lows in the Dow Jones Industrial Index. The theory states that a new high in the Dow Jones Index needs to be confirmed by a new high in the Transportation Average. If the Transportation Average does not confirm the new highs then we, in theory, need to be concerned about the potential selling of Dow Jones stocks.  The chart below shows that the Transportation Average is not confirming the new high we saw last week in the Dow Jone Index. So, at this time some caution may be warranted going forward.

 

 

John N. Lilly III AAMS

Portfolio Manager, DJWMG

 

The Dow Jones Transportation Average (DJTA) is a price-weighted average of 20 Transportation stocks traded on the New York

Stock Exchange (NYSE) and the NASDAQ and is the most widely recognized gauge of the American transportation sector. It is

not possible to invest directly in an index. Opinions expressed are not necessarily those of Raymond

James & Associates. The information contained was received from sources believed to be reliable, but accuracy is not

guaranteed. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee

success.

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