Our chart of the Dow Transports compared to the Dow Industrials indicates that the transports are breaking down on a relative basis. Resistance established in March and May is about to be broken through, indicating the transports are falling behind the industrials at a faster pace. Transports lead the stock market, and weakness in the economy is often telegraphed by their performance first. Continued weakness compared to the Dow Industrials would not be a good sign for the economy.
