Transports Test Important Support
Chris Kimble | Nov 20, 2017 11:23AM ET
One year ago this month, the Transports/S&P 500 ratio peaked and has since been heading lower, showing that the transports have been diverging against the broad market. Below looks at the S&P 500's performance relative to IYT.
The chart above shows that IYT under-performed the S&P 500 by nearly 10% over the past year, with a good deal of under-performance happening over the last few weeks.
Below looks at the pattern of IYT over the past few years-
IYT is testing rising support, which could be a support test of a bearish rising wedge pattern. At this time, the trend is up, despite the year-long divergence.
What IYT does at (1) could send an important message to this key sector. Historically, this sector sends an important message to the broad market.
h3 Bottom Line/h3What IYT does at (1) could send an important intermediate message to the sector and the broad market.
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