What we see from this cycle (circa 2014) is that Transports rallied after commodities rolled over, but then Transports eventually got the memo.
Meanwhile this inverse head and shoulders formation is yet another deja vu from 2008, only a cycle degree larger:
But don't take my word for it:
What the heck happened to the transports? One after another, they are rolling over just when we would expect them to advance. It's becoming unnerving and, after hitting all-time highs recently, we don't want to be surprised by their declines.
The stocks of the airlines and the rails have been obliterated and the whole pulverization's pretty shocking.
CEO Lance Fritz came on Squawk on the Street and he was so glum he made me concerned that the second half could be a real downer, even as I don't think that's the case."
Speaking of global mass delusion. Railroad revenues are higher because commodity volumes are higher as a function of lower price.
This is how collapse has been misconstrued as bullish:
"The positive results come after CN’s rival Canadian Pacific Railway reported record profits last week, with revenues hitting $1.6 billion, driven largely by higher volumes in bulk products such as coal, potash and, to a lesser extent, grain."
Unfortunately, that's not the whole story:
S&P 500 revenues with Transports