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The US Markets are taking the day off, but Chris Kimble, our veteran market technician, remains on the job, today inspecting the railroads.
Rails outperformed the broad market in 2007-2008, moving higher for almost 10 months after the peak in the S&P 500 index.
As the chart shows, numerous bearish patterns took place in 2008, and once support broke, rails declined almost 50% in a matter of months and the economy likewise slowed.
Of late, rails have outperformed the 500 index and hit a high, later than the broad market index.
Key to watch right now: Rails have created a similar pattern to 2008 and are testing EXTREMELY CRITICAL SUPPORT.
A "Railroad Crossing" of support would be a HIGHLY IMPORTANT SIGNAL!
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