I was at a trading meeting over the w/e and there was some commentary about potential warning signs seen across the US transport sector and so I thought it was high time I checked back in on this sector again. My view is a bit more upbeat than that from the w/e though despite seeing a bit of divergence. Here is what I’m seeing on the major US stock indices and the few ‘Transports’ that I watch and, also, what I’m thinking.
General comment on the US Stock Indices: The major US stock indices, and their ETFs, all appear to have made Bull Flag-style breakouts on their weekly charts BUT with little supporting momentum just yet. Also, whilst most are above their weekly Cloud, trading volumes are low and declining hinting at a bit of potential bearish divergence. This does not necessarily undermine the bullish breakout moves but it does suggest caution is needed. I’m on the lookout for any uptick with momentum to support this bullish bias.
General comment on the ‘Transports’: I am actually quite buoyed by what I’m seeing across the three ‘Transports’ I watch as they look rather bullish. However, one of the three is showing some divergence suggesting an element of caution is needed.
S&P500 and SPY:
S&P500 weekly: This has closed at a new weekly HIGH and with a Bull Flag breakout but note the lack of ADX momentum for now. Keep an eye out for any ADX uptick though to support this bullish move.
S&P500 daily: there is momentum building on the daily chart though so watch to see if this flows through into the weekly chart:
S&P500 monthly: I am still looking for a move up to 2,500:
SPY weekly: S&P500 ETF: this, too, has made a bullish breakout but note the lack of momentum here as well:
SPY weekly Cloud: above the weekly Cloud BUT note the bearish divergence. This may be a warning?
DJIA & DIA:
DJIA weekly: This has also closed at a new weekly HIGH and with a Bull Flag-style breakout but there is not much momentum here either:
DJIA weekly Cloud: some divergence here too despite being above the Cloud:
DIA weekly: DJIA ETF: A bullish breakout on the DJIA ETF but with not much momentum just yet:
DIA weekly: DJIA ETF: divergence here too yet above the Cloud:
NASDAQ & QQQ:
NASDAQ weekly: A Bull Flag here but not much momentum:
NASDAQ weekly Cloud: no divergence here to speak off though:
QQQ weekly: NASDAQ ETF: A Bull Flag here too but little momentum just yet:
QQQ weekly Cloud: NASDAQ ETF: above the Cloud but no divergence:
Russell 2000 and IWM:
Russell 2000 weekly: A Bull Flag here but not much momentum just yet either:
IWM weekly: Russell 2000 ETF: ditto here:
IWM weekly Cloud: Russell 2000 ETF: a bit of divergence on this index though:
IYT weekly: This transport ETF appears to have made a Bull Flag-style breakout but with little momentum just yet:
IYT weekly Cloud: watch for any bullish Cloud breakout. No divergence here to speak of:
FDX weekly: Fedex looks like it could be heading for a bullish breakout so watch the trend lines for clues. Not much momentum here just yet though:
FDX weekly Cloud: above the Cloud which is bullish and no evident divergence:
UPS weekly: the parcel service area seems to be on the mend with a bullish Flag-style breakout AND bullish momentum!
UPS weekly Cloud: however, this is a bit of bearish divergence so caution is needed:
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