Ok, the cartoon and me in character as Transportation might appear a bit silly, but the content and its importance to the overall market is hardly so.
Combing the technical
signal in the Transportation sector IYT, along with the classic inside day in
the S&P 500 and the Dow, is exciting to tech nerds like Tran (and me.)
The alignment you are
about to see is nearly textbook perfect.
How can something so
complicated be so simple?
First off, what is an
That is when the
trading range of the current day is within the trading range of the prior day.
represents a pause in the action or uncertainty of next direction.
Such is the case with
SPY and DIA.
The chart of IYT
indicates a breakdown under the 200 DMA (green).
However, although IYT
did not have an inside day, it did close above the prior day’s lows. It also
had 2 doji days. That’s when the opening and the closing prices are virtually
Another indication of a
pause or uncertainty.
So here’s the easy
Should IYT fall below 187.93
and the SPY breaks 277.48 (yesterday’s low), don’t overthink. The market wants
On the other hand, if
IYT clears 189.96 (yesterday’s high) and the SPY can hold above 279.59 (also
yesterday’s high), keep your bull or pilot’s hat on.
S&P 500 (SPY) Inside day,
which lines up perfectly with a break of the 10 DMA should 277.48 fail.
(IWM) 157 pivotal all around. And especially on a
weekly close. With that said, a close under 156.50 should bring in more
Dow (DIA) Inside day. A
break of 258.77 corresponds with a break of the 10 DMA
Nasdaq (QQQ) Missed an
inside day by one tick. Yet, a break of 171.76 is noteworthy since it will
break prior day low and the 200 DMA.
(Regional Banks) A break of 55.98 also breaks the
10 DMA and shows its inability to clear the overhead 50-WMA.
(Semiconductors) Inside day here too. Closed
under the 10 DMA but if breaks under 102.22, should see 101 area.
(Transportation) Keep 189.61 in
your mind as the ultimate weekly pivotal level to hold or not
(Biotechnology) 109.87 the
pivotal point. 115 major resistance
(Retail) 44.62 pivotal support with 46.80 major