Transports Duck is Broke

After months of techincal and price weakness we have seen the emergence of a nascent rally in the Transports. Transports will be key in the development of new market leadership given the collapse in oil prices and their role in early economic recovery.

Note the break of the 3-month bearish divergence in stochastics; currently overbought in the short term. Plus the weakening of the bear trend. I have marked in Fib retracements as the watch zone on the decline.


Nothing in yesterday's action suggested anything more than profit taking in the face of rare gains. But what happens as part of this decline - and where it stops - will be very important for the intermediate/long term picture. TraderMike says it best in his market summary.

Thanks to Charles Kirk for the Kirkbert Bump - biggest one day traffic ever!


New Visitors - please subscribe either to my feed, or my twitter feed which is routed to cover all my blog posts here, and on Zignals, in addition to links to my PDF newsletter.



Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Popular posts from this blog

S&P "Bull Trap"?

Image
I thought there was sufficient evidence to argue against a "bull trap" in the S&P, but it would appear the market wasn't interested in such thoughts and sellers were quick to reverse the initial push above 4,200.  Adding to the pain were new 'sell' triggers in MACD and On-Balance-Volume, although the former occurred above the 'bullish' zero line, making it a weak signal. Selling volume ranked as distribution as selling momentum picked up speed.  The index is also underperforming relative to the Russell 2000. 
Read more

"Black Candlesticks" are a concern for the S&P and Nasdaq

Image
A bright start for bulls on the back of positive $NVDA earnings wasn't enough to generate a day of meaningful gains.  However, it did help stall the losses of the last couple of days. The Nasdaq was the biggest beneficiary of today's action, but not enough to see an end-of-day finish that cleared last week's swing high, nor delivery of a large white candlestick, despite the morning breakout gap.  Technicals are net bullish and relative performance against the S&P has become consistently stronger since the start of May.  While today's candlestick I would view as typically 'bearish', today's volume ranked as confirmed accumulation (bullish). Overall, I would be looking for higher prices from here. 
Read more

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Image
The Nasdaq started brightly but ended up closing below its open price, but above yesterday's close. The S&P did something similar, although the intraday range is narrower. These two setups are somewhat complicated by the new 'buy' triggers in On-Balance-Volume for both the Nasdaq and S&P. And the new MACD trigger 'buy' for the S&P. Price action is key, so I would expect the candlestick to trump the technical picture; watch for lower prices tomorrow.
Read more

Archive

Show more