Transports; Could be repeating 1999 & 2007 pattern

kimblecharting's picture

Below looks at the Dow Jones Transportation Index over the past 20-years. Before we discuss the chart below, let me be clear about this, the trend at this time remains up.

The focus of this chart is what the highs in 1999 and 2007 looked like. As you can see, in 1999 and 2007, the transports made attempts to breakout above old highs and each time it did make a “moderate new high” each time at (1). Then weakness came in, breaking support and selling picked up speed.

DJ Transportation index

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As mentioned earlier, the trend remains up in the transports and they are attempting to breakout to new highs. Would take very little gains to create a breakout.

As Transports are attempting to breakout, the current pattern looks a little like prior highs in 1999 and 2007 at (2).

Breakout above resistance at (2) = Positive move for this key sector.

Breakdown of short-term rising support at (2), could cause selling pressure to increase and could make the current pattern start looking all the more like 1999 and 2007.

Transports are in a tight stop, caught between overhead resistance and short-term rising support at (2). Which one is taken out (breakout/breakdown) should send an important message to the broad markets.

 

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conspicio's picture

Chart porn without the notation of what fuel prices for transports looked like back in the previous two instances. Also debt loads at significantly higher underlying rates. And factor in consolidation and dramatic shifts in pricing models (airlines, anyone?) and I would say that was was past is not what is present. Looks good on a chart, but the underlying patterns formed on entirely different circumstances.

scv's picture

revoke nafta globalist cross-border transportation provision

international long haulers (mexico to canada, canada to south america) transporting freight not destined for usa across this country interstate/highways, avoiding tariffs and ports,

completely fucking destroys usa roads, causing HAZARDS, while some transport tons of illegal drugs and contraband near our communities.

Goldbugger's picture

TA used tow work well before the 08' crash. Now the BOTS have taken over.

Greenspazm's picture

"Dow Theory" was always wishful thinking, and due to the frequent changes in the composition of the indices has become patently absurd. As someone else so aptly commented a while back, technical analysis is like placing bets on whether you can grab a particular turd and hold onto it before it gets flushed out of the toilet bowl.

LawsofPhysics's picture

Technical analysis in a fucking casino...

good luck with that.