Fin - Breakout - US

Transports Are Signaling a Global Bull Market Ahead: Hays

Jeff Macke

One man's failure at resistance is another man's breakout. Unlike certain advocates of thick purple trendlines, forecaster Don Hays sees the short-lived new high for the Dow Transports (^DJT) last month as a defined moved above all-time high levels, a bullish indicator for many trend-watchers.

Espousing the belief that the "market is the best barometer in the world for man's wisdom," the Chairman and Chief Investment Strategist of Hays Advisory says a move higher in the stocks of companies carrying the goods of which strong economies are made (commodities, consumer products, et al) indicates the smartest investors are betting on an economic recovery. Hays is emphatically in this bullish camp and points to a specific stock as a "tell" for the market as a whole: FedEx (FDX).

"If FedEx breaks out over $98.50... people are going to feel better about the economy," says Hays. He notes that the stock hasn't broken above that price point just yet but he feels as though it will. The pending breakout of FedEx and the Transports isn't his primary bet, but it does suggest to Hays that a global recovery is well on its way and any backing and filling of the charts would simply serve as a launching pad for the next move. Hays emphasizes that this move will be catalyzed not just by an American recovery but one that encompasses the whole world.

Do you share Don's bullish long-term view for the world or think we're merely at a weigh station on the path to another recession? Comment in the space below and let the debate begin!

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