Transportation IYT’s Voice of Reason

March 2, 2020

Mish's Daily

By Mish Schneider

Nothing surprises me in the market world of pump it up!

So, as the spread of the virus continues to dominate the headlines, the notion of the G7’s “emergency” meeting to deal with the shocks to the world economy (through Central Bank rate cuts) became the day’s panacea.

Which is why I am so very happy when one of my Economic Modern Family becomes a voice of reason.

Such is the case with the Transportation sector or ETF IYT.


Until the very last 20 minutes of the day, IYT had a picture perfect inside day.

In the last 20 minutes, IYT resigned to the fear of missing out and took out Friday’s high of 169.57.

What’s next?

Now, going into Tuesday, we have some reliable support areas to watch hold. (see levels below)

On the Daily chart, IYT shows the potential for a double bottom going back to 2018’s low.

The moving averages well overhead are both negative in slope. The 50-DMA accelerated its move towards the 200-DMA.

Granted, a rally to test the 200-DMA (green) would be impressive.

Nevertheless, well before that moving average, the 175 level is key.

The bigger question on investor’s minds should be whether this move today will be enough to get the Russell 2000, Transportation and his brethren back over their 200-DMAs to improve in phase?

Remember, the Family has classically underperformed the SPY and QQQs.

This is precisely what I plan to cover this coming Wednesday March 4th 1 PM as part of the very exciting webinar the called Women Teach Trading and Investing: Opportunities for Everyone in Today's Markets

As volatility continues to soar and the markets trade like commodities did in the early 1980’s, please join my talented women trading pals and I for a “live in the market” inside view to my trading process.

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S&P 500 (SPY) 304.50 is the 200-DMA now pivotal especially on a closing basis.

Russell 2000 (IWM) Thursday’s open was at 151.35 which makes that level pivotal Tues with 149.15 the key support to hold.

Dow (DIA) 264.86 was Thursday’s opening level now pivotal support to hold with 272.55 the 200-DMA

Nasdaq (QQQ) 211.05 is the support to hold with 221 the key 50-DMA resistance

KRE (Regional Banks) 51.20 the next point to clear with support at 48.26

SMH (Semiconductors) 140.30 big resistance and 132 key support

IYT (Transportation) 169.57 pivotal support with 175 resistance

IBB (Biotechnology) 117.70 key pivotal support. 120 good resistance

XRT (Retail) 40.77 super pivotal support with 42.95 resistance

Volatility Index (VXX) Holding the 200-DMA in this tape

Junk Bonds (JNK) 108.53 is the key

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