Leading S&P Railroad Index at Important Juncture

Chris Kimble at Kimble Charting Solutions put up a great chart this week showing the S&P Railroad Index coming up against some big time resistance. Not only are we approaching the all-time highs from last July, but this level also represents the apex in a massive wedge pattern.

As a major component of the Dow Jones Transportation Average, new all-time highs in Rails would be a good omen for the broad market. This is one of the areas where we want to see continued leadership. If the Railroad Index were to roll over at this critical level, I would expect to see some additional selling to come in other industries.

(Click Chart to Embiggen, twice for Ginormous Version)

Names like Union Pacific ($UNP) and $CSX Corp tell us a lot about the economy. I think Mr. Kimble nailed it on this post. As the Dow Jones Industrial Average comes up towards new 52-week highs, the Dow Transports are close to making All-time highs. Further leadership out of this group would be extremely positive.

Source:

Breakout or De-Rail for S&P Railroad Index (ChrisKimble)

Tags: $TRAN $DJIA $DIA $IYT