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

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.

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