Transport Sector Dumps, Is This A Warning Sign?

This morning, leading transportation stocks such as CSX Corporation(NASDAQ:CSX) and United Continental Holdings Inc(NYSE:UAL) are declining sharply after reporting earnings. These two transportation giants are putting pressure on the highly followed iShares Dow Jones Transport. Avg. (ETF)(NYSEARCA:IYT) which is trading lower by 1.40 percent today. Many traders and investors will track the transportation sector as a leading indicator for the overall market. At this time, the transport sector is still in an up-trend as it remains above its 50-day moving average on the daily chart. So today’s decline is simply nothing more than a pullback at this time. This moving average is very important for the trend and is watched by many institutional traders. A daily chart close below the 50-day moving average could signal trouble for the transportation sector and the overall stock market.



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