Planes, Trains and Moving Averages

April 3, 2018

Mish's Daily

By Mish Schneider

blankI have not yet introduced you all to the economic Modern Family dolls.

Here is the Transportation sector ETF IYT or our Trans.

He is an airline pilot and extremely important to the macro picture.

I have written many times about the transportation sector as my “go-to.”

The movement of goods and services is key to the overall economy and supply/demand.

With IYT green today, the S&P 500 recaptured the 200 DMA to enter back into an unconfirmed warning phase (improved from Distribution).

That needs a second close above 258.76.

And as written last night, “if SPY holds 256.20, especially by the end of this week on a closing basis, then we will see a relief rally at the very least.

With IYT in a strong warning phase, what does this chart tell us going forward and how will that impact the rest of the market?

I show you the Daily chart in the photo. The green line is the 200 DMA.

The yellow the 100 DMA, blue the 50 DMA and cyan the 10 DMA.

With the price below all the MAs EXCEPT the 200, IYT holds on to the warning phase, which from the slope of the 50 DMA, is accelerating in strength.

On the weekly charts, not shown, 188.30 is a key resistance point, which is slightly below the 50 DMA at 190.65.

So, first and foremost, the 200 DMA at 180.30 must hold.

Secondly, with today’s inside day, IYT must clear 188.30.

And then, should it get back over the 50 DMA, we could have renewed buying with vigor.

Trans as a prefix means ever changeable.

Trans as a sector means watch for the next big change.

S&P 500 (SPY) Unconfirmed Warning Phase which means to confirm we must see a second close over 258.76. Also with an inside day, over 263 could see move to 267 then 269.

Russell 2000 (IWM) Inside day above the 200 DMA which means follow the move either below 147.96 or above 152.

Dow (DIA) Inside day. Like better above 241 and warning under 234

Nasdaq (QQQ) Inside day. Like better through 161 and not so much under 152.84

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