Don't Ignore This Chart!

Railroads Start To Come Off The Rails


One of the nice traits about the railroads is they are one of my indicators to help with general market direction. I have found that when the railroads start to underperform the $SPX, that is typically a confirming signal of broader market weakness.

While I have been bearish for a while, the railroads starting to break the trend line of relative performance indicates that this will be a bigger than average breakdown. The PPO on the weekly chart is also breaking below zero. That doesn't happen very often. 

Here is a longer term picture.

Be careful out there!

Good trading,
Greg Schnell, CMT, MFTA

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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