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The Conundrum In This Market

There’s a real conundrum in the market and chances are you’ve missed it. Fortunately technical analyst Dan Fitzpatrick hasn’t!

He tells Fast Money that most people watching the stock market are watching the financials and tech. (And why not. They’re interesting and making lots of headlines.) But chances are you’ve probably missed what’s happening in the transports.

For the month the Dow Jones Transports has popped a whopping 16%. Take a look at the chart below.

That's more than twice as much as the move in the Dow Jones Industrial Average over the same period.

And Fitzpatrick says the trend presents a conundrum because transports are climbing in the face of higher oil . (That shouldn’t be the case, they should be trading inversely.)

“There are a lot of strange undercurrents in this market,” he says. And this is one of them.

However, patterns appear bullish to Fitzpatrick and, as a result, he thinks the transports still have room to run. “My sense is that the transports index will run higher into Kansas City Southern earnings at the end of the month,” he says.

But he cautions, like everything in this market, this is a trade. When the trend breaks, the trade is done.


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