Market Analysis

Chart in Focus: $TRAN

Anyone watching the trannies? Some interesting things going on there related to timing, structures and patterns.

Firstly note that transports ($TRAN), like the larger market has embarked on an aggressive “V” shaped recovery since the December lows. And like $SPX it has reached its broken 2009 bull market trend line.

Lo and behold it’s rejecting this trend line as resistance at the moment:

This rejection simply validates that the trend line has relevance still. As of this moment the slight poke above the trend line has failed. That is not to say $TRAN can’t launch another attempt again later.

But note $TRAN has now clearly broken its wedge pattern:

Transports have also shown relative weakness versus the rest of the market in recent days.

Why is that relevant? Because weakness in transports led the decline last year. While $SPX kept flirting with all time highs in September transports were already markedly moving lower:

Are transports signaling a repeat play here? Perhaps too early to tell, but based on the history and the broader chart pattern they remain a key index to watch in the weeks ahead.

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