Transportation Hanging On For Dear Life

May 2, 2018

Mish's Daily

By Mish Schneider

blankIn New Mexico, I see these huge choppers ridden by people who become dwarfed in comparison.

Besides looking unwieldy, the motorcycle also seems rather uncomfortable.

Yet, it’s all about show and perception.

The bigger the bike, the bigger the….

In the market, the more the Transportation sector performs, the bigger the chance for a better market rally is.

In the meantime, both bullish and bearish traders sit uncomfortably atop a cumbersome environment.

Note the feet barely on the ground and the outstretched arms (Ape Hangers).

That’s the rider’s best chance of keeping the chopper from falling over.

Traders should precariously balance their P&Ls.

Like our rider, have your arms out (sell stops) so you don’t get too hurt.

And, keep your feet close to the ground (go to cash) in case the market topples over.

The vehicle to help you determine how confident you should be in your chosen direction is our very own IYT, or the Transportation ETF.

Therefore, same question again today.

Will IYT get back over its 50 DMA?

Currently, the Russell 2000 (IWM) leads the indices.

Flashing in and out of a bullish phase, today, IWM closed in an unconfirmed bullish phase.

That means, it must confirm tomorrow.

Regional Banks (KRE) and miraculously Granny Brick and Mortar Retail (XRT) maintain bullish phases.

Biotechnology (IBB), though tells a different tale.

With the bearish phase and recent death cross, the highly speculated sector has fallen off the chopper.

Already bruised, one more fall off the bike could put a long-term damper on IBB’s future rides through the town.

Our Wonder Woman Semiconductors (SMH), could not confirm the move over the 200 DMA.

SMH failed that MA once again and now is back in an unconfirmed distribution phase.

So, with 2 family members dropping the bike, and 3 family members still going full hog, it’s up to the bike itself with IYT’s influence, to put the hammer down (accelerate) or lay it down (crash).

181.97 is the 200 DMA. 188.42 the 50 DMA.

With IYT right in the middle, it’s either ready to go on the rails (rally) or spark the pavement (scrape the ground.)

S&P 500 (SPY) Held the 200 DMA. Though under 261 it won’t. Over 268 gets interesting.

Russell 2000 (IWM) 154.14 pivotal. Through 155.55 better. Under 154 see 150 next

Dow (DIA) 237.33 the 200 DMA

Nasdaq (QQQ) Under today’s low see trouble. Over today’s high will challenge the 50 DMA

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