The Dow Jones Transportation Average (^DJT) is up again on Tuesday. It’s on pace for a fourth straight gain and now sitting about 4% below its all-time closing high.
Meanwhile, the Dow Jones Industrial Average (^DJI) is still lagging. It’s roughly 7% below its own closing high and has been stuck just under its 200-day moving average for over two weeks.
That gap matters under the Dow Theory, which says rallies are more convincing when the companies making goods and the companies moving them rise together. Instead, the two split sharply in December, when transports pulled away and industrials failed to follow.
Transports also held their 100-day moving average during March’s pullback, despite surging fuel prices, and still sit above both their 100- and 200-day averages.
If industrials can step back over their 200-day averages, odds favor a catch-up move. If not, the warning is that transports may eventually “catch down” and join the industrials to the downside.
Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.com.
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