IYT is Diverging With SPY and DIA Again, Transports Have Been Underperforming the Market

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One thing I've noticed recently is that IYT, the Dow Jones Transportation Average Index ETF, has been underperforming and diverging with SPY and DIA (S&P, Dow ETFs) during the past 6 months. I had a post on IYT's inverse relationship with SPY and WTIC (crude oil) back on March 1, when IYT's correlation with SPY went sharply negative. I think oil's spike was responsible for bringing transportation stocks down at that time. It's interesting that oil eventually got knocked out because of this, and IYT, which closed at $90.51 yesterday, is still down 2.8% from $93.16 on March 1. But, I will mention that IYT is still outperforming SPY and DIA since the ultimate low in March 2009. It's just interesting that SPY and IYT started to decouple in a major way at the beginning of 2012.

1-month chart of IYT vs. DIA and SPY (source: freestockcharts.com)

3-month chart of IYT vs. DIA and SPY

6-month chart of IYT vs. DIA and SPY

YTD chart of IYT vs. DIA and SPY

12-month chart of IYT vs. DIA and SPY

YTD+ chart of IYT vs. DIA, SPY, and Oil.