Mike's Mid Day Minute is available to members on Monday, Wednesday & Friday evenings, with one article per week available to non-members. Members please login and see "Mike's Mid Day Minute" in the navigation menu towards the top of the page.

Transports Climb While Oil Declines


Transports Climb While Oil Declines
By Mike Paulenoff, www.MPTrader.com

The iShares DJ Transportation Index ETF (AMEX: IYT) continues to act as though oil prices are considerably lower than $101/bbl and that the U.S. economy is hitting on more cylinders than currently perceived. Let's note with interest that crude oil prices ENDED their prior correction ($86) during the third week of January, which also coincided with the corrective low in the IYT at 71.62, and since then oil prices have climbed to a $111.80 high, while the IYT has continued to climb as well. HOWEVER, during the past week or so, oil prices have DECLINED by 10% while the IYT has CLIMBED about the same percentage, which may just mean that a more "intuitive" inverse relationship may be emerging (oil down, Transports up). In any case, let's notice that the IYT is pushing up against its Oct-Mar resistance line, now at 88.00, which if hurdled and sustained should trigger upside follow-through to 90, and then 93 thereafter. Why? Like I mentioned at the outset, the IYT appears to be anticipating considerably better conditions for the transportation stocks in days and weeks ahead. Only a plunge beneath 84 will wreck the developing bullish pattern.

  • Action-Oriented Trade Set-Ups in Stocks & ETFs
  • Macro Analysis of the Broader Markets
  • Detailed Technical Guidance for each Trading Idea
  • Live Interaction w/ Mike & Our Member Community
  • And Much, Much More!
Join Now! - Special Offer!
Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

Have Mike's “Out Front” morning analysis delivered FREE to your email inbox twice weekly!