Companies that haul stuff haven't had a run like this in 120 years

Even in a market that can't seem to go down for more than a couple of days, one index stands out. Among all major indexes and sectors, few can match the persistence of stocks that haul stuff.

The Dow Jones Transportation Average just completed its 13th straight week with a gain. None of them were tremendous, but the persistence is incredible.

The Transports set a 122-year record for weekly persistence a couple of weeks ago. Last week just added to the gains. 

Dow Transports 13 weeks gain

There weren't many streaks of 10 weeks of gains or longer, only 5 others when the index was trading at a 52-week high. So we're dealing with a tiny sample size and all the challenges it brings with it if trying to form any conclusion. 

The handful of times Transports managed to do this, forward returns were sketchy over the next 6-24 months. Only 1 out of the 5 other signals managed to show a profit even 2 years later. 

Stat Box

Over the past 5 days, an average of more than $2 billion per day has flowed into the S&P 500 fund, SPY. That's among the largest amounts in 5 years. But according to our Backtest Engine, out of the 22 other days that saw extreme inflows, SPY was still higher a month later after 14 of them, averaging 2.0%.

What else we're looking at

  • Full returns in Dow Transports and Industrials since 1900 after 10-week streaks of gains
  • What sectors and factors did best after long positive streaks in Transports
  • A detailed update on absolute and relative trends in sector, industry, and country ETFs
  • What happens when many stocks in the S&P 1500 are overbought

The post titled Companies that haul stuff haven't had a run like this in 120 years was originally published as on on 2021-05-04.

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