Transports Setting the Pace
- Posted by Greg Harmon
- on March 19th, 2014
The Dow Jones Transportation Average ($DJT, $IYT) pulled back with the market in January. But after finding support at the 100 day Simple Moving Average (SMA) and consolidating it jumped higher and made a new all-time high at 7627.44. That was March 7th, and it has been sitting here since. Solid strength in the transports. Dow Theory looks for the Dow Jones Industrial Average ($DJIA, $DIA) to make a new high as well to confirm the broad trend continuing higher.
But that has proven difficult so far. The attempt on March 7th fell short of a new high. it missed by less than 83 points or 1/2%, but that matters. To the Dow Theory that is. With the last two days forming a higher low and closing in on a test of the highs will the second time be the charm? It is only 1.5% away as of Tuesday’s close. But we will have to wait and see. The longer we wait the more tense traders and investors will become about a another failure. But just how long do the Industrials have to make a new high? Well the answer is generally, as long as they want to take. Much of trading is a test of patience and this aspect is no different. If the Transports make a new all-time high Wednesday, it does not mean that
the Industrials have to do the same Wednesday, or Thursday or next week. In fact as long as the Industrials do not make a new low then confirmed by a new low in the Transports they can take their sweet time going higher. Do you have the patience to wait?
Get my book, Trading Options: Using Technical Analysis to Design Winning Options Trades from Amazon.
Dragonfly Capital Views Book Launch Celebration
Last week to join the Dragonfly Capital Views Premium Membership on an Annual basis for only $618.
This special Fibonacci rate (1000 divided by Φ) will be gone soon. Don’t miss this opportunity to join or upgrade! Sign up here. As part of this celebration, the first 25 annual subscriptions will also get the book*.
*book will be sent after payment is processed. It will also require you to send me your address for delivery.
Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through February 2014 Expiry and sign up
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- SPY Trends and Influencers July 4, 2015
- Macro Week in Review/Preview July 3, 2015
- How This Week’s Premium Top 10 Performed
- Two Paths in the Nasdaq 100
- Sailing higher with Nordic American Tanker
- Resistance is not a brick wall
- Yahoo! Stock of the Year 2015, I mean 2016?
- Premium Earnings 6-30-15
- Premium Earnings 6-29-15
- Top Trade Ideas for the Week June 29, 2015: Bonus Idea