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Friday, March 24, 2017

Market Update 3/24/2017 Using $TRAN as a guide

 Using market leader $TRAN as a guide 

$TRAN typically leads the DOW, just as $SOX leads tech; that's why I watch these 2 especially. 

$TRAN has also been following oil, which isn't normal, because Airlines typically benefit from lower petrol (oil) prices. My thought is that tankers, and trucker, sold off as Oil went lower, although I haven't cross-checked separate $TRAN components.  $TRAN stands for "Transportation" btw

Assuming Airlines have sold off with oil, this looks like the travel ban trade? Just a thought.  

Yesterday I noticed an interesting pattern developing on the $TRAN chart - another broadening triangle pattern. These patterns form in emotional markets, and once they complete, they mark a major reversal. 

$TRAN looked like it had topped out in wave 5 - in a smaller contracting triangle, but the lack of selling pressure seems to rule out a major top in wave 5.  
See the ALT: (wave) "4" target in what looks like a broadening pattern. 

The old EW count looked like this: 

The revised EW count looks like a higher high in wave 5. 

Dow also looks like it wants to go higher. 

Adds to my bullish outlook, going into the Passover/Easter holiday. 
Have a great weekend, AA 

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