The Decadent Age of Outliers

As my friend Jonathan Krinsky just pointed out on Twitter (@jkrinskypga), TPOR, the triple-levered long transportation bull is up over 40% here, which is all the more wild considering CAR (Avis rental car) was just a 1.13% weighting in IYT transportation ETF before it was halted on its spike higher today. 

Thus, what we have here is a bonafide outlier move in a major sector, especially considering the transports were notable laggards throughout the late-spring and deep into the summer months. 

For reference, observe the updated Dow Jones Transportation Average daily chart, below, Again, the IYT is the ETF derived from this Index. 

This is a major, major part of the economy and market and the entire index is up 12-14% ON THE DAY! You could trade for many decades to come and never see the transports as a group up this much in any given session, ever again. You may see them down this much into a crash, but up this much, especially with a market at all-time highs? I doubt you will see this again. 

Needless to say, we are seeing more outliers in what has been a market full of outliers (and Lord knows what else) in 2021. Ironically, this is happening in front of the FOMC tomorrow, where Powell is supposed to begin a return to normalcy.

The bottom line is that these types of outliers, of this order, are historically seen in frothy tapes which are long in the tooth...