From Market Folly:
...Currently, the Transports average $TRAN is stuck in a very solid trading range, and has been for quite some time (as illustrated below). It has very strong support around the $2900 level and one should look to buy there. There seems to be a short opportunity setting up in transports as the average reaches resistance around the $3200 level. And, keep an eye out to see if the index breaks out of this past overhead resistance (as well as the 200 day moving average, which also acts as resistance). You can obviously play this by buying/selling various transport names like trucking companies, railroad plays and such.
A breakout over this heavy layer of near-term resistance would be obviously very bullish for transports. And, if this happens, it could be a signal that the recession is drawing nearer to a close, seeing as transports act as a leading indicator to economic activity. But, we unfortunately would expect the transports to fail at this resistance, setting up a nice short of the group. Because, after all, with the consumer in the house of pain, what has really changed with the economy? We would love to be proven wrong, though.