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September 26, 2005

Dow Transports have moved, Mon., Sept. 26, 2005, 8:15 AM

The Dow Jones Transportation Average Index has slowed down in a big way since 4Q04. A chart of the share price of the index fund, which trades on the AMEX as IYT, illustrates that sideways pattern.

Just a week ago Delta Air Lines Inc. (DAL) and Northwest Airlines Corp. (NWAC) were deleted from the Dow Jones Transportation Average index. Overseas Shipholding Group (OSG) replaced DAL and JetBlue Airways (JBLU) grounded NWAC.

After filing for protection under bankruptcy laws, Delta and Northwest Air have poor optics to traders.

Here is a link to charts of these affected stocks:

Changes in September to Dow Transport component stocks

So, I thought it would be good to look into the IYT to see what's up (and what's not).

Here are the March-31-05 components of IYT.

I believe that until you see a new bull phase to these key stock components in the Dow Jones Transports, you will not see a new bull phase to the Dow Jones Industrials. Part of the Dow Theory states that Transports (and Utilities) must confirm the Industrials.

Just remember that fuel costs are depressing the Transports as well as other industrial segments of the U.S. economy. A good place to look for signs of an improving economy is right here in these particular stocks.

Posted by Posted by Bill Cara on September 26, 2005 08:15:26 AM | Category: 20 Industrials