It’s been awhile since I posted on total North American rail traffic so I thought I’d update it today with the latest information. After a middling month of March, rail traffic has again begun to accelerate from April through last week, coming in at 696k carloads versus 679k the prior year.

As I have said on all these other posts we have to make some adjustments when talking about the absolute numbers and comparing them to previous years. Coal traffic (red line below) collapsed in late 2011 as shale gas became abundant (shipped via pipeline not rail). That has had a roughly 20k per week negative effect on carloads. To give you some scale 20k carloads is about the total amount of food and grain products shipped via rail each week in North America.

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Now, some will say shale oil has replaced that. Total weekly coal shipments

While the S&P 500 has been speeding toward new highs, the Dow Jones Transportation ETF (IYT) is really burning up the fast lane. So is it still a good bet? A Thomson Reuters StarMine model analysis shows that the Dow Transports don't seem to be hitting any big stop signs in the near future, especially when it comes to the latest analyst earnings growth forecasts.

Check out the chart below. Through May 15, the S&P 500 (blue line) climbed 17%; the S&P 400 midcap index (orange line) jumped 19% -- and the Dow Jones Transports ETF (red line) beat them both, recording a 24% gain in total return.

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As we approach the Memorial Day weekend, investors seem torn between fear and greed -- fear that these lofty heights augur a correction… and the lure of potential further gains. Not everyone's bullish in the short run. Some analysts

This week's rail traffic reading showed modest improvement over recent weeks, but the longer-term trend remains negative. Intermodal traffic was up 3.9% this week, which was an improvement over last week's reading of 2.8%. The data, however, continues to soften on a rolling three-month basis with the latest reading coming in at 3%. That's the lowest level since January. The good news is we're not seeing the type of consistently negative readings that tend to precede a recession. The bad news is that the growth is tapering.

Here's more via The Association of American Railroads:

The Association of American Railroads (AAR) reported an increase in traffic for the week ending May 11, 2013, with total U.S. weekly carloads of 280,986 carloads, up 0.6 percent compared with the same week last year. Intermodal volume for the week totaled 248,266 units, up 3.9 percent compared with the same week last year.

The complete set of U.S. economic indicators for March is finally in, so let's take a look at how the U.S. economy performed.

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The spring swoon in the economy arrived early this year helped by a double whammy of payroll tax increases and the enactment of the sequester on March 1, 2013. There is some good news, but mostly bad news. Let's start with employment. The unemployment rate continues to go steadily down helped by positive employment numbers, however, job creation was not up to par for the season. Both non-farm payrolls, private payrolls and ADP employment registered weaker numbers compared with the prior month and the prior year. They are positive so the overall effect on the economy is positive, however, they reflect a job market that is stuck in steady-as-she-goes mode and is far away from generating the 250,000 jobs per month that are necessary

When major banks met discussing the world economy Saturday, there were no calls for the banks to try to do more because economic indicators have been up. Even though they considered brainstorming to see if there's anything else that can be done before the meeting started nothing came of it. The ECB as a whole is exploring the concept of promoting small business through "asset-backed securities" (ABS).

ABS allows banks to protect their balance sheets because they can package these loans and sell them to other investors. In fact it was this type of packaging that originally paralyzed the credit markets and caused the financial crisis because of defaults \in housing. In this exploration, not all members of the G7 supported the concept for the ECB. The German financial minister expressed his opposition saying that something like this would basically boil down to "covert state financing" and is not something

Rail traffic trends have been undoubtedly weak in recent weeks as we've seen double-digit year-over-year growth slide into negative territory. This brought our 12-week moving average from a high of 6.75% in March down to the low single digits.

The latest intermodal traffic data from Association of American Railroads (AAR) showed 2.8% growth, which is an improvement from last week's 1.6% reading, but still trending lower on a monthly basis. We're now at a three-month low in the moving average at 3.13%. So there are some small signs of stability, but the overall trend is still down.

Given the negative readings in recent weeks, we should see this trend continue to weaken further in the coming weeks. Rail traffic appears to be confirming the muddle through scenario, but is clearly not consistent with recession.

Here's more detail from this week's report via AAR:

The Association of American Railroads reported

I focus more on fundamentals to select the stocks that I trade and suggest on my site. However, I can't ignore technical analysis, and this week there were some very important things that appeared on some very long-term charts. With the S+P 500 (SPY) breaking above 1576 and the Dow Jones industrials (DIA) and the Transportation index (IYT) confirming the move to new all-time highs, the thirteen year secular bear market in stocks is over for now-- and based on history, will be probably for quite a while like for two or three more years.

Because of our lack of knowledge of long-term history, most in my generation were unaware that in the stock market, you usually have a long period where stocks outperform most asset classes and make incredible moves like Dow 4,000 to 14,000. However, then they suffer violent bear markets where they essentially lose 40-50% of

Is now the time to rotate away from the defensive sectors and into the undervalued and under-owned metals and mining sector? Extremely high levels of recent insider buying in mining stocks suggest so.

The stock market itself moves in cyclical waves. It's driven in both directions internally by its constituents, which also have their own waves. From Technology (QQQ), Utilities (XLU), Healthcare (XLV), Transportation (IYT), Consumer Staples (XLP), Basic Materials (IYM) and Metals and Mining (XME), each sector plays a vital role in the overall performance of the market.

Sectors become hot and cold based on economic conditions and investor sentiment. Currently, the top sectors year-to-date are all highly defensive in nature. The performance of the Utilities, Healthcare and Consumer staples sectors in comparison to the Technology, Basic Materials and Mining sectors demonstrate the current investor appetite for risk (or lack thereof).

The contrarian investor and sector rotation strategy

April rail trends finished with a whimper as intermodal rail traffic came in at 1.6% on a year-over-year basis. This continues a series of weakening data points as the Q2 period begins. After a very healthy three-month average reading of 5.3% in Q1, the second quarter is off to a very sluggish start with a 0.38% average reading. The most recent reading brings the 12-week trailing average to 3.54%, which is the weakest reading since January.

Here's more from The Association of American Railroads:

The Association of American Railroads today reported that U.S. monthly rail traffic showed mixed results in April 2013, and traffic was also mixed for the week ending April 27, 2013.

Intermodal traffic in April 2013 totaled 962,019 containers and trailers, up 1.6 percent (15,053 units) compared with April 2012. April's weekly average of trailers and containers, 240,505,

The Bakken and Marcellus shale formations will free America from its dependence on foreign oil, help our economy and increase employment. That's been the message since 2008. However, according to Washington Post's Brad Plumer, this shale oil boom hasn't helped GDP. But I will explain later why this doesn't change my investment attitude.

The U.S. economy has expanded roughly 7.6% since the recession ended in 2009 - far outpacing other developed GDP regions such as Great Britain, Japan and the EU. Many experts and investors assume that a large portion of that growth is a result of cheap energy thanks to the boom in North American shale oil. Plumer argues that's not been the case.

He cribbed information from a Capital Economics report written by Paul Dales explaining how the oil boom barely added to GDP.

"Since June 2009 the volume of oil and gas extraction has risen

After a big first quarter, rail traffic has come out of the gate extremely soft in Q2. The average pace of year-over-year expansion in intermodal traffic was a very healthy 5.3% in Q1, but has averaged just 0.08% so far in the first four weeks of the second quarter. This is a trend that has been developing since early March as the pace of expansion has averaged just 2.11% since the first week of March.

Overall, that brings the 12-week moving average to 4.01%. That's still a healthy pace, but the recent slowing is a trend worth keeping a close eye on. If rail traffic is any indicator, it's possible that economic growth peaked in Q1.

Here's more from The Association of American Railroads:

The Association of American Railroads reported mixed traffic for the week ending April 20, 2013, with total U.S. weekly carloads of 276,662 carloads, down 2

With Berkshire Hathaway's (BRK.A) annual meeting--the Woodstock of Capitalism--set for Saturday, May 4, many investors are preparing to flock to Omaha once again to hear pearls of wisdom both from Berkshire's chairman Warren Buffett and vice chairman Charlie Munger.

It's virtually impossible to overstate the influence that Munger, who recently turned 89 years old, has had on Buffett and on Buffett's investing discipline. Buffett regularly labels Munger as his "partner" at Berkshire, and fills the firm's annual shareholder letters with phrases like, "Charlie and I believe..." In fact, in Berkshire's 2012 letter, Buffett makes reference to their long and fruitful working relationship, noting that "more than 50 years ago, Charlie told me that it was far better to buy a wonderful business at a fair price than to buy a fair business at a wonderful price." That insight has guided Buffett over the years and helped him become more

In March, the nation's trucks hauled almost 4% more tonnage around the country than they did a year ago. This is good evidence of the increased physical size of the economy and its continued overall growth.

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The top chart shows the long-term trend in truck

This weekend I attempted to tackle the four strongest criticisms against my short thesis published last week, 5 Reasons Why I am Shorting The Market:

1. Sentiment - Irrational pessimism?
2. Valuations - Undervalued? Or, perhaps overvalued?
3. Timing - Why here, now?
4. You can't fight the Fed

Overview

A week and a half ago I made what some believe to be a rather bold move, I began positioning short in a raging bull market. I had my reasons, which I believed to be convincing. My position was relatively small at the time.

That following weekend I decided to give this negative outlook further consideration; one seldom makes money shorting a bull market. Upon reflection, I added to my short position Monday morning. Still a relatively small position, the bearish evidence - in my opinion - outweighed the bullish. Below are the five reasons put forth last week:

1. Negative Divergences: World

The latest rail data from the AAR showed another weak year over year reading at just 0.2%. This brings the 12 week moving average down to 5.25% from a recent high of 6.75% and is likely to slow substantially from here. Looking at the recent data and current trend it would not be surprising to see ~3% readings in this data by the time May rolls around.

For now, the data is still consistent with a growing economy, but it will be interesting to see how this data pans out as the summer rolls around. We’ve now had 4 consecutive weeks of negative average readings so hopefully this is not a developing trend.

The AAR has more details:

The Association of American Railroads (AAR) reported an increase in traffic for the week ending April 6, 2013, with total U.S. weekly carloads of 280,748 carloads, up 3.7 percent compared with the

The big sell-off seen in the Dow Transports this week had the bulls running scared. Today, however, the Transports made a move that surely has the bulls a little more comfortable heading into the weekend. At the open this morning, the

There's been some slowing in rail traffic data in recent weeks, though the pace of growth remains positive. This week's reading came in at 1.4% year over year, which brings the three-month moving average to 5.75%. This trend is likely to remain elevated for a few more weeks before the recent weakness begins to make the data look a lot weaker. Rail traffic isn't looking recessionary, but it's definitely weakening.

Here's more from AAR:

The Association of American Railroads reported an increase in traffic for the week ending March 23, 2013, with total U.S. weekly carloads of 278,738 carloads, up 0.2% compared with the same week last year. Intermodal volume for the week totaled 235,641 units, up 1.4% compared with the same week last year. Total U.S. traffic for the week was 514,379 carloads and intermodal units, up