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Saturday, March 12, 2005 10:34:50 AM
Do the Dow Transports predict business cycles?
http://boia.bankone.com/WeeklyEconomicReview/2004pdf/wer-10-13-04.pdf
Lets look at the Transports and this write up to see how accurate it is shall we? First we see that Bank One accurately states that the transports outperform early in an economic recovery.
BPTRAN has been at 100 in 2004. We know that the index simply cannot get any stronger even if the stocks associated with it continue to rise:
3 Year Weekly Charts:
The next assertion that Bank One Makes is that the DOW Transports soften before a recession. They certainly did in advance of the market top in 2000 and the eventual recession that followed:
More than likely when we see the Dow Transports begin to struggle it will be an early sign of an impending market top and an upcoming recession.
RtS
http://boia.bankone.com/WeeklyEconomicReview/2004pdf/wer-10-13-04.pdf
Lets look at the Transports and this write up to see how accurate it is shall we? First we see that Bank One accurately states that the transports outperform early in an economic recovery.
BPTRAN has been at 100 in 2004. We know that the index simply cannot get any stronger even if the stocks associated with it continue to rise:
3 Year Weekly Charts:
The next assertion that Bank One Makes is that the DOW Transports soften before a recession. They certainly did in advance of the market top in 2000 and the eventual recession that followed:
More than likely when we see the Dow Transports begin to struggle it will be an early sign of an impending market top and an upcoming recession.
RtS
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