TRAN Transportation Daily Chart Dow Theory Non Confirmation H&S:
Trannies showing the July high (green circle) but the Dow Industrials never came up to make a new high, thus, Dow Theory non confirmation. Price has fallen like a stone, the 4950-5050 area is important support. Note the negative divergence blue lines that created the spank down a month ago. Histogram, however, the blue circle, was very strong, so some upward movement in price would be desired to burn off some of that strength. The red bars show a left shoulder and head for an H&S, perhaps a move back up will create the right shoulder in the coming weeks. A failure of the 5000-ish support area will lead to the 4300-4500 target.
Chart favors some sideways movement going forward, the 4950-5050 support should hold, for now, then in the weeks ahead weakness should resume and the door will open to lower numbers once again.
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Trannies show the rising wedge top in July with the pink H&S targeting 4200 which was achieved. The light blue lines show the positive divergence bounce projected for October. Price moved up in October, the 38% Fib retacement did not put up much of a fight, so price continued upwards thru the 50% Fib. The 62% Fib is serving as a ceiling now which is also the 200 day MA. Look at how price has traveled across the 50% and 62% Fib range.
A break below the 50% Fib at 4800 is very negative for the transports and the broad markets. Projection is for price to move sideways to sideways down moving forward.
Note Added 11/21/11 at 9:33 AM: TRAN is printing 4776 currently, failing the 50% Fib, see if price stays under 4800 (very bearish for the broad markets), or not.
Note Added 11/21/11 at 10:18 AM: TRAN 4725.
TRAN at 4702, about to fail the 4700 level as this is typed, down 140 points today currently.
For TRAN chart use search box above for keystone speculator.