Transports Head South
This morning, the important transportation sector is declining sharply lower. The iShares Dow Jones Transportation Index (NYSEARCA:IYT) is trading down by $1.41 to $$93.40 a share. This index is followed by many institutional traders as a leading indicator. When the transports decline it is a sign of economic weakness and contraction. The opposite is true when the transports advance, it is viewed as a sign of economic expansion and growth. Traders can watch for intra-day support on the ITY around the $93.00, and $91.70 levels.
Some leading transport stocks that are retreating lower today include FedEx Corp (NYSE:FDX), Union Pacific Corp (NYSE:UNP), and United Parcel Service Inc (NYSE:UPS). All of these stocks still remain strong on the daily charts, therefore, this simply looks like a normal pullback at this time.