#Dow Transports Review $IYT - Soft Landing Ahead?

Dow Trans Review

Short-term price fluctuations do not influence long-term trends, cycles, and profitability. The majority, guided by price trends and emotions, concentrate on short-term trading noise rather than cyclical trends of price, time, and energy. This focus creates confusion, frustration, missed chances, and typically leaves them holding the bag during trend shifts. Investors can sidestep this pattern by embracing the Evolution of the Trade and aligning with the minority.

The Dow Transports' overall trend, revealed by trends of price, leverage, and time, are defined in The Matrix for subscribers.

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Soft Landing Ahead?

The Evolution of the Trade's basic tenants:

(1) Do not trade against the primary trend
(2) see Rule 1

Stocks are rallying again based on the assumption that the Fed will engineer a soft economic landing by continuing to lower short-term interest rates (Fed Funds rate) following another soft CPI report. The odds that the Fed will cut again have shifted from September to June.

Please remember, the majority believes that the Fed holds all the strings; they control interest rates, stocks, the housing market, and more. This is a false assumption that will be broken from 2025 to 2026. The US Bond Report discusses why this interest rate cutting cycle is different from previous ones. The invisible hand is saying to the Fed, “go ahead and continue to play your game, but we're not financing it.” This has smart money worried. Dumb money, afraid they will miss out, is blindly chasing stocks higher.

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The Dow Transport Average, an economically sensitive index, has returned to triple alignment.

So have Junk Bonds,

This is consistent with an Economic Activity Composite (EAC) that refuses to break below the zero line within a bear cycle inside a bearish sub cycle (see Economic Activity Composite (EAC) Chart). The odds that stocks decline remain low until the EAC falls below zero. What is the invisible hand discounting? This remains unknown. Our job is not to force opinions onto the market, but rather observe and follow.

Economic Activity Composite (EAC) Chart

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Market-driven money flow, trend, and intermarket analysis is provided by an Access Key.