Transportation Sector Still Key To Market’s Breadth

Considering the sea of red in the market and tomorrow’s jobs report, let’s step back and look at Transportation IYT.

Every index and all economic Modern Family members stepped back today.

To follow up on my analysis of Beyond Meat BYND, it fell today as well.

At this point, I see no reason to buy. A substantial gap up above recent levels or, news lows and a new reversal pattern is what I am waiting for.

Elsewhere, yields fell along with the U.S dollar.

In the commodities world, gold, silver, miners, coffee and sugar all gained.

The agricultural commodity ETF DBA is holding above 15.75, just waiting to take out 16.00.

Since I am even more encouraged about the commodities and the prospects for higher prices, does today’s action change the perspective for equities?

The weekly chart in IYT indicates a potential bearish engulfing pattern.

Using candlestick charts as you see I have for IYT, when the body of the candle from the current week literally engulfs the body of the candle from the week before, that is considered a potential bearish signal.

However, the week is not over.

Should IYT close the week out over 189.40, then that negates the bearish engulfing pattern.

That scenario will be good for the whole market.

Today, IYT held the 200-DMA and popped.

The bigger support at 185.10 (50-WMA blue) should hold.

And if IYT can move above 189.40, good chance we will not see that 50-WMA for a while longer.

Should IYT sell off more, than I expect we will see that area of support rather quickly.

S&P 500 (SPY) 300 support. 302 pivotal. All-time high 304.55.

Russell 2000 (IWM) 155-156 Key support to hold (on a closing basis). 153 next support. 158 resistance

Dow (DIA) 270 pivotal support. 265.50 support

Nasdaq (QQQ) All-time highs at 197.83. 195.55 support

KRE (Regional Banks) 55.00 resistance 53.00 support

SMH (Semiconductors) 125.50 support and ATHs at 130.16

IYT (Transportation) 195 key to clear 189.40 pivotal and 185 support

IBB (Biotechnology) 105 pivotal 108 resistance

XRT (Retail) 44 failed-now pivotal resistance. A weekly close over 43.00 best