July 26, 2017
By Mish Schneider
“Cause I'm leavin' on a jet plane
Don't know when I'll be back again
Oh babe, I hate to go” John Denver
Today at 5 PM EST on Mish’s Market Minute Daily Facebook page live, I introduced Trans Transportation. https://www.facebook.com/mishsmarketminute/
The Latin origin of Trans means “across,” “beyond,” “through,” “changing thoroughly,” “transverse.”
Thus, in the cartoon, Transportation (IYT) is transgender because IYT is a variable and ever-changing element of the US economy.
In today’s world, the nature of how goods and services move through the economy is shifting with e-commerce and the internet.
IYT, the ETF symbol, is depicted as an airplane pilot who is also skilled at truck driving and freight train conducting.
Our Trans will bring you the “goods” via trains, planes and automobiles.
Currently, IYT trades in a bullish phase yet lags the DJIA after making new all-time highs on July 14th.
Charles H. Dow’s Theory said over 100 years ago that Transportation is a key component of the U.S economy.
Dow said that a bull market in industrials could not occur unless the railway average rallied as well.
Will his theory prove out?
Interestingly, the struggles of brick and mortar retail stores could be a boon for Transportation.
In my early iterations of the MMMDaily, Granny Retail (XRT) and Transportation (IYT) worked in tandem.
Perhaps more to do with buying and sending parcels directly from retail chains, 2 years ago, the correlation seemed more relevant.
However these days, with online shopping, buying and sending parcels remains tied into Retail, but not the brick and mortar kind.
Yet the disconnect between Amazon, which made another new all-time high today and IYT, which closed basically unchanged and $5.00 off from its all-time high, remains curious.
Today, after the Federal Reserve said they would keep interest rates unchanged while still planning to reduce the balance sheet later, commodities picked up substantially.
Equities closed mixed.
Granddad Russell 2000 lost ground closing back under the daily chart channel. That could be perceived as a failure.
One could assume that now Granddad is more tied to what happens to Trans as Granny has her own issues to deal with.
Furthermore, Regional Banks (KRE) our Prodigal Son I introduced yesterday, interpreted the Fed’s statement as negative for rates.
Back to apologizing, KRE hung his ten-gallon hat and fell by 2%. No worries though-his cat is still bullish on America!
The market wants to see the FED raise. A vote of confidence I gather.
Since, they missed a great opportunity with their dovishness, time to tighten your seatbelt.
S&P 500 (SPY) Inside day near the highs. 246.50 pivotal support
Russell 2000 (IWM) 142.90 big number for the month end close. Above, holds over the top of the monthly channel. A close below, could be perceived as a failure
Dow (DIA) Boeing helped this today. 215 now pivotal
Nasdaq (QQQ) 144 pivotal
KRE (Regional Banks) Why I call him prodigal. Lavish one day, apologies the next
SMH (Semiconductors) 88.00 new resistance to clear
IYT (Transportation) If can clear 172.50 much better. If fails 169.05 I’d take heed
IBB (Biotechnology) Got 10 cents shy of target at 330. Inside day today
XRT (Retail) Confirmed recovery phase. 40.42 pivotal
IYR (Real Estate) 80.70 should not hold
XLU (Utilities) Unconfirmed bullish phase
GLD (Gold Trust) 119 pivotal
SLV (Silver) Got right to the 15.80 resistance
GDX (Gold Miners) 22.65 should now hold if good
USO (US Oil Fund) confirmed return to a recovery phase. 10.00 pivotal resistance
TAN (Solar Energy) consolidating
TLT (iShares 20+ Year Treasuries) Below 122.80 would be indication of higher rates to come. 124 resistance
UUP (Dollar Bull) Landed right on the200-week moving average
FXI (China) Big move up-
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