Barking with Hackles up at fence

We have lived at the same place since Jake was a puppy.
Starting yesterday afternoon, he has begun to bark with hackles up at the east fence. We do have new neighbors to our east, which our dogs met this weekend. They have been there over a month and they do have a dog. Again, he started this last night, while they were outside (he has been out before when they are outside).Now, he won't stop barking aggressively at the fence. He runs up and down the fence barking (like he does when he hears a strange noise). He did it again this morning around 5:00 (that is what time I get up). Yes, I rushed him in not to wake anyone up.
I try to comfort him but it isn't working. I tell him no bark, and he will stop for a few and then run over to the fence and begin again. What can make a dog do a complete 180 when it comes to this? I was thinking something happened like a loud noise and it freaked him out, or they popped over the fence, or as my other half thinks they were smoking something funny (Jake keeps his nose in the air and doing the sniff thing). Any thoughts would be appreciated or just experiences with this. Anyone have ANY CLUE what is going on? How do I curb this behavior?

can only be something to do with your new neighbours.......do you really get up at 5????!

A fellow 5'er , lol, I get up that early Everyday, weekdays and weekends, lol, not a night person, love my mornings!! Generally, how did he act when you first introduced them ???? Because, my dog senses things she doesn't like about people and we can't get it out of her head, we know it only after we realize just how they are in real. Like my mom's ex-Boyfriends mother, she never liked her, and she had never done anything for Lilly not to, but lilly never liked her, then one day we got a taste of the real her, and now we take a second thought when Lilly doesn't like someone right away.
BUT also, I can understand your worry. Lilly was socialized very well as a pup, but here in the last 2 months, she has gone a little nutty. She barks at everyone, tries to tear through the door when someone knocks at it, and tried to attack a neighbor who came through our front fence(thank god lilly too overweight and can't jump over it, lol) We have no clue as in why she does this, our only idea is that something has changed in the dog's life that she is upset about and she is acting out, OR she just doesn't like something they do or did, or maybe she knows something you can't yet???? I have no clue, maybe that can help....
Cassie and Lilly

My dogs do the same thing, indoors and out. I don't let them out alone if I think there is a chance they may bark. They also do it inside the house through the windows, if let up to them nobody would be allowed to walk past the house. I am in the process of breaking the bad behavior, what I have read is that you have to teach your do to do a non compatiable behavior, so let's say your dog barks at the fence, you call them over to you to sit, or you engage them in tug or war, anything that will take him away from the barking. You call him over to you have him sit and give him a cookie. I'm still working on it with my dogs, my trainer says teaching a dog not to bark at things is one of the hardest things to train.
Don't comfort your dog, if you say somthing like "it's okay" you are basically saying it's okay keep barking. Be firm and say no bark of whatever command you are using. Good luck.

Someone on another site suggested I take him over there, with treats in hand. Also, said sometimes dogs react to ferret or ginnue pig smell.

So over I went and lo and behold ther was a cage with two ferrets in close proximity of the fence. We stayed about 10-15 minutes for him to sit and smell. Since Saturday, his barking/hackle dance has decreased.

I don't have much advice, just wanted to welcome you to Pet Talk. You are on the Utah Dogs forum aren't you?

Nebo, my husky, never barks at the fence....my parents schnauzers do all the time though...we just have to bring them in the house when they start it up. They'd all be going crazy if there were ferrets by the fence too.

Yes we are from Utah Dogs,,,where did you hike to get those beautiful photos?