Sunday, March 23, 2008

Dow Jones Transport

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Another week of crazy market is behind. On Monday the S&P 500 broke January 23rd low just to recover about 5% by the end of the week. Very unexpected recovery for those who follow the news… All the media around the world is talking about recession, yet the market is where it was in the beginning of the February, 2008. If you take a look at 2-year chart you will see that the last 2 months the market moves flat. Yes, the range is big and is between the January 23 low and February 1, 2008 high (on some indexes it’s about 10%), however, basically, we are back where we were two months ago. In addition the DJI index still did not the brake the January 23rd low.

From 1-year chart you may see that the recession started in October 2007. (Does anyone remember when media started to talk about recession??? Where they were in October?)

If you take a look at DJT (Dow Jones Transport) index you will see that this index started the down move back in July 2007. It would be wrong to say that now the DJT index in the bear mood – this index more than 17% up since the January 22nd low!!!

The DJT went into the recession about 3 months earlier than the rest of the market… can we assume that the DJT may start to recover from the recession a few months earlier as well?

1 comment:

Tiger Coach said...

These are some darn interesting comments. I am quite interested to see you angle on the President's new "vision" of the FED's role in economics. Would these be a case of the fox watching the hen house?

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We have many similar sentiments about the markets.