Should We Be Worried About The Truckers?

The Dow Theorists are flipping out.

What this group wants to see is the Dow Jones Transportation Average make new highs whenever the Dow Jones Industrial Average takes out a previous peak. Dow Theory states that they need to confirm each other. In an uptrend both should be making new highs, and when one doesn't, there's a problem. Same thing in a down trend - when one average makes a new low, the other should follow. If there is a divergence, it's considered a positive.

So this Spring, when the Dow Industrials took out their 2011 highs, we were waiting for the Transports to confirm. They never did.

Today I wanted to look at a chart of just the Truckers vs the Dow Jones Industrials Average to show just how weak this space looks right now:

So should we be worried about what the truckers are telling us?

I think so.

Tags: $IYT $TRAN $XTN $DJIA