Market out of whack! What does it mean?

Ever since the financial crisis, the Transports to Industrials ratio has traded laregely in sync within a falling channel.

Why?

Well, it's the chart-art barometer of goods shipped / economic activity and it makes sense it'd flow within a range throughout the business cycle.

Interestingly, it broke above the channel in the recent monster transports move.  

Does this mean anything?  

I'll hypothesize it means there is an excess in Transports that needs corrected in the next pullback.  That pullback may just be right here and now.  After all, when the ratio broke the lower boundary into the 2012 election, it immediately snapped back on a market pull back.    

Looking at the IYT daily chart, we have warning signs in RS and momentum not confirming new price highs. It's definitely vulnerable to a moderate correction, within a rising trend. 

Looking at XLI, the bear case is relative strength has fallen off the map as price has failed to make a new high.  The bull case is it's building a very attractive base and the economic data is there to support it.

One last thought:  Why would a paradigm shift occur 5 years into a major market move?  

It seems likely the best way to play this is long industrials as they catch-up.  Or you could pair that with a short transports as they start to come back to earth(that's not a given).     

Trade 'em well!