Chart of the Day: Can the Market Really Crack Here?

I had a great conversation with two of my favorite technicians this week – and they highlighted the incredible strength we’re seeing in a key sector. That got me thinking: Can the market REALLY crack with it performing so well?

Take a look at the MoneyShow Chart of the Day — which shows the Dow Jones Transportation Average ($DOWT). Yes, it’s an old-school index. Yes, it’s just 20 stocks. But does this chart look like something you see when the economy is falling apart and a bear market is looming?

(To get more articles and podcasts from MoneyShow, subscribe to our Top Pros’ Top Picks newsletter here.)

Transports are on Fire...Despite Higher Energy Prices

Source: TradingView

What’s even more remarkable is that we’re seeing so much strength at a time of surging oil and gas prices. The average includes railroads, airlines, and truckers like CSX Corp.(CSX), American Airlines Group Inc.(AAL), and JB Hunt Transport Services Inc. (JBHT). It also includes the car rental company AvisBudget Group Inc. (CAR) and the rideshare giant Uber Technologies Inc. (UBER).

Many of those industries are very sensitive to higher fuel costs. Things are so dire at struggling discount carrier Spirit Airlines (not in the average) that it’s seeking a federal government bailout.

But as JC Parets and Steve Strazza highlighted in my MoneyShow Virtual Expo session with them Tuesday, just look at the chart! It speaks volumes. The Index is up 37% year-to-date – and 79% in the past 12 months.

So, sure, it’s natural to worry about war-related headlines. But if you’re a trader, you have to trade what’s actually happening in markets – not what you think “should” be happening. And right now, the strength in transports makes it awfully hard to be too bearish!