Over the last few days, the market's strongest sector has started to lag.
A Monster Drop
The iShares DJ Transport Average Index (ARCA:IYT) has taken the markets higher and hasn't looked back. Until now, that is. As a leader, the weakness starting to show up recently should be noted. It very likely speaks to weakness on the horizon for the whole market. Look at airline stocks like United Continental (NYSE:UAL), which was down more than 4.5% mid-day Wednesday. That's a monster drop that has spread to a majority of other airline stocks. The weakness in the transports is very much like the weakness seen in the (NASDAQ:Biotech Index) just months ago, prior to its 25% correction. That drop in biotechs took the NASDAQ down almost 10%.
If transports remain weak, use it as a leading indicator to signal a drop in the S&P 500 and the Dow Jones Industrial Average.