Bottom Line: The Transportation Average reached a 5-year high last week and is now only 11.2% below its all-time high set May 12, 1999. Historically, this index is a leading indicator of economic growth. From 5/12/1999 through 3/8/2000 the index plummeted 40.6%, while the major indices rose, correctly predicting the most devastating broad market decline since the Great Depression and ensuing plunge in economic growth that began in early 2000. The Bears and many media pundits suggestion that high energy prices are pushing the U.S. economy towards recession do not correspond with the strength of this energy-intensive leading index.
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