Thursday, October 17, 2019

#Dow Transports Review $IYT

Dow Trans Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to long-term trends, it does not define them. The focus on short-term noise rather than trends, a source of confusion for the majority of investors, leads to the creation of bagholders at major trend transitions.

The Dow Transports' overall trend, revealed by trends of price, leverage, and time, are defined in the The Matrix for subscribers.

Subscriber Comments

ALIGNMENT (Price & Volume)

The Transports composite trend is Up BO, Cons, Up BO. The computer records this as a Double Up. Double Up alignment are generally less powerful than Triple Up, but this setup suggests something more powerful brewing. The two upside alignment are breakouts (BO). BO, an onset of alignment, while common for the daily trend is highly significant for the monthly. BO in the primary trend suggest a primary trend flip. Subscribers wait for months for primary trend flips (see Evolution of the Trade). A primary trend flip for the Transports won't be finalized until the end of the month, so subscribers need to keep watching. A primary trend flip escalates the trade from energy build nibble to core position.

ENERGY (Diffusion Index)

No leverage profile.

Participation (ProIndex)

While Transports' ProIndex supports the rally that generated the Double Up alignment, it has yet to unwind the negative divergence with price that began in late 2017. The negative divergence, like Palladium, suggests net selling from professionals since 2017. Subscribers need to watch the ProIndex closely as the primary trend attempt to flip. If the trend flips but the negative divergence still exists, it would lower the risk of the core position.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.