Transport stops rolling

  • Transports are always a leading indicator in measuring the health of the economy
  • The Dow Jones Transports Index ETF (NYSE:IYT) failed the 40d MA resistance and dropped sharply
  • It has engulfed the prior 4 trading days so it is quite a bearish signal
  • Volume was huge
  • It is now testing the support of the november highs. Going below this one means time to buckle up and consider shorts.
  • A look at the second chart, the Baltic Dry Index. The Baltic Dry Index (BDI) is a number issued daily by the London-based Baltic Exchange. Not restricted to Baltic Sea countries, the Index tracks worldwide international shipping prices of various dry bulk cargoes.The index provides “an assessment of the price of moving the major raw materials by sea. It is also often used as a leading indicator.
  • A look at the chart combined with the $SPX shows a HUGE disconnect between both. Two options. BDI is oversold or $SPX is due for a serious correction.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s