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How to read the
Dow Jones Transports Indicator?
When interpreting the chart above, you need to remember
that the most important factor is the relationship between Index
Price and the Volume Moving Average (VMA).
In this example, the index is in a downward trend just after 12:00.
The downward trend continues until the VMA has reached a peak and this sharp increase
in the VMA signals that a bottom has been
reached for the day and that professional investors are buying. Once the VMA has
peaked, that signals the safest point in which to make a trading
decision, as it is here that the index has confirmed a new upwards
trend.
Below is an example of how one of our exclusive
institutional investors used this signal for
the index to maximize profits by
trading some of the derivatives of the Dow Jones Transports index:
Details of the above trades, and the derivatives used for this index, can be found in the detailed overview and in the member's section of our site.
Listed below are some of the derivatives
which you can trade using this indicator:
| Securities |
Issuer |
Type |
Symbol / Root |
|
Dow Jones Transportation Average |
CBOE |
Options |
DTX |
|
Dow Jones Transportation Average LEAPS |
CBOE |
Options |
DTX |
|
Dow Jones Transportation Average |
CBOT |
Futures |
DQ/DV |
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By trading index securities using our volume indicators instead of stocks, you gain stability and predictability that stocks do not have. An index is a far more logical in it's actions than the individual stocks it's based upon.
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