AIRLINES ARE LEADING INDUSTRIAL SPDR TO NEW HIGHS -- AIRLINE LEADERS ARE UAL, SOUTHWEST, AND JETBLUE -- TRANSPORTATION AVERAGE ISHARES CLEAR 50-DAY LINE -- DOW INDUSTRIALS NEAR NEW RECORD -- S&P 500 IS ALREADY THERE
INDUSTRIAL SPDR HITS NEW RECORD... Chart 1 shows the Industrial Select SPDR (XLK) trading in record territory today. Today's higher price action is pushing the XLI above a sideways trading pattern that's been in effect since the start of March. Its relative strength line (above chart) is also starting to strengthen. Among the XLI leaders are commercial vehicles & trucks, rails, and aerospace. Today's biggest leaders, however, are the airlines. And that's what we're going to focus on today. We'll also show that airline strength is also starting to boost the transportation sector.
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Chart 1
DOW JONES US AIRLINES INDEX IS CLIMBING... The daily bars in Chart 2 show the Dow Jones US Airlines index climbing to the highest level in nearly three months. Its relative strength line (above chart) is climbing as well. And it's the strongest part of the Industrial SPDR (XLI) shown in Chart 1. It's also the strongest part of the transportation sector. A couple of airline stocks have already hit new highs. Several others are heading in that direction.
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Chart 2
UAL AND SOUTHWEST AIRLINES HIT NEW HIGHS -- ... Chart 3 shows United Continental Holdings (UAL) already reaching a record high. Chart 4 shows Southwest Airlines (LUV) at record highs as well. Those are the two airlines leaders. Several others are also climbing. Chart 5 shows JetBlue Airways (JBLU) nearing a four-month high. Chart 6 shows American Airlines (AAL) close to doing the same. Chart 7 shows Delta (DAL) also in an uptrend.
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Chart 3
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Chart 4
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Chart 5
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Chart 6
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Chart 7
TRANSPORTATION ISHARES CLEAR 50-DAY AVERAGE... Climbing airlines are good news for the transportation sector. And it's beginning to show on its chart. Chart 8 shows the Transportation Average iShares (IYT) rising above its 50-day average today. Its May bottom found support just above its 200-day moving average. That's a logical spot for new buying to emerge. And it appears to be doing that. The transports are one of the stock groups that have been underperforming the market all year. And it's one of the groups that needs to start to doing better to support a higher stock market. That's especially true of the Dow Industrials.
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Chart 8
DOW INDUSTRIALS BREAK THROUGH RESISTANCE...S&P 500 HITS NEW RECORD... Chart 9 shows the Dow Jones Industrial Average ($INDU) climbing to the highest level since early March. That upside breakout makes a record high more likely. The Nasdaq Composite and the S&P 500 are already trading at record highs (see Chart 10). According to Dow Theory, the Dow industrials and transports should rally together in a healthy uptrend. The industrials are doing their part to continue the market's uptrend. It's time for the transports to start climbing as well. Hopefully, they're starting to do that.
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Chart 9
