Wednesday, June 24, 2015

Some perspective on the transports stinking


$TRAN still stinks:




However, looking back at longer-term charts, I saw that the transports grossly outperformed SPY from Nov 2012 to Nov 2014, 85% to 50%.

It's one thing to quote Dow Theory, and another entirely to argue that transports are supposed to grossly outperform the entire rest of the economy that they are transporting.

So I'm now significantly less concerned about the $TRAN divergence. Hey, we already saw a similar such divergence from Jan 2012 to Nov 2012, which followed the May 09-Mar 11 $TRAN outperformance, and that 2012 transports divergence eventually was followed by a 2-year 50% pop in SPY.

Hey, another thing: the past 6 months of $TRAN weakness is almost a 10% correction! And the panty-piddlers just love 10% corrections, don't they? I mean, they keep screaming for a 10% correction. So why aren't they buying transports right now?


No comments:

Post a Comment