Gotta Have the Transports

 | Feb 28, 2012 | 3:25 PM EST
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You can't do this assault on Dow 13,000 without the transports. You just can't. It's too glaring. Especially on a day when oil is down.

We should have a spike in the transports today and, indeed, we are getting a somewhat anemic rally in the airlines. The truckers, which have a fuel pass-through, aren't doing much and haven't since Expeditors (EXPD) blew up the other day. But the rails -- oh my. They are just being totally victimized by coal. Yesterday coal got a little respite almost in homage to Burlington Northern's (BNI) momentum, something we saw in the Berkshire Hathaway (BRK.A) letter. Today, it's back to reality with simply horrendous performance.

Plus, every time you read a story about Israel and Iran you are reminded that Israel may have no choice but to strike against Iran, no matter how horrible the consequences, because Iran's run by a holocaust denier who think it's a right of Iran to wipe Israel off the face of the earth.

Now, I would have to believe that if you catch a third day down in a row for oil I would believe something's up and someone knows something we don't about why war can be averted or, heaven forbid, we get a war but it won't send oil up 40-50%.

Of course, if you want the transports to go higher, you make it a mission to lower the price of fuel for all by adopting, as a national mandate, natural gas as a bridge fuel. The truckers who go with nat gas can take share. The airlines can breathe easier because nat gas would actually move the price of oil lower.

The group would have no problem taking off. (For more on how we are NOT adopting this course, please check here for an article by my colleague Matt Horween.)

Until then, we are going to be in limbo without a big move in the transports so nothing definitive's going to happen without this most important index confirming a Dow rally.


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