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Thursday, February 26, 2009

Transportation Index Makes New Low

The Dow Jones Transportation Average (TRAN) got rejected at the previous day's high and then hit a new low on decent volume. Uh oh. The index has gone from over performance to severe under performance, versus the S&P 500 (SPX). This renders any strength in the broader equity indexes extremely suspect.

For example, the S&P 500 (SPX) was relatively stronger yesterday. However, failure to get above resistance of about 770 will result in a test of the lows around 742. The weakness in TRAN may be foreshadowing just such a test.

Sure the markets are Extremely Oversold, but it is from oversold territory that crashes occur. There is Still More Downside to equities.

4 comments:

none said...

yesterday:

"With Equities Sitting on Support, and Extremely Oversold, expect this counter trend bounce to have some follow thru. This will put significant downward pressure on precious metals."

today:

"Sure the markets are Extremely Oversold, but it is from oversold territory that crashes occur. There is Still More Downside to equities."

tomorrow?:)

Greenlander said...

Im seeing potential for major tankage here.
$BKX looks ready to roll over on both the daily and 60 min timeframes.

http://stockcharts.com/h-sc/ui?s=$BKX&p=D&yr=0&mn=7&dy=0&id=p56495137819&listNum=1&a=146285267

http://stockcharts.com/h-sc/ui?s=$BKX&p=D&yr=0&mn=7&dy=0&id=p56495137819&listNum=1&a=146285267

Ben Bittrolff said...

none,

They tried to bounce it, but kept smashing into a wall of supply around 779 on the S&P 500.

The Transports (so broadly speaking all things cyclical such as industrial plays etc) turned down and tagged new lows first.

So the story changes...

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