Transports could be repeating 1999 & 2007 now!

Below looks at the Dow Jones Transportation Index since 1994. Is it possible that the Transports index is repeating the patterns that were created back in 1999 & 2007? Below is an update on a potential pattern that we have been sharing with members for months.

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In 1999, Transports closed slightly higher than in 1998, which appeared that a bullish breakout was in play. Quickly the index reversed and broke support at (1), which was followed by a good deal of selling pressure, driving the index much lower. The breakout was nothing more than a fake out in 1999.

In 2008, Transports closed slightly higher than in 2007, which appeared that a bullish breakout was in play. Quickly the index reversed and broke support at (2), which was followed by a good deal of selling pressure, driving the index much lower. The breakout was nothing more than a fake out in 2008.

Over the past couple of years, the pattern in the transports looks a good deal like it did in 1999 & 2007. As we have been sharing with members for month, the odds of a repeat are low, yet if the pattern we are sharing would happen to be correct, the impact could be quite large.

At this time the Transports index is testing rising support at (3). Even if the pattern do not repeat, if support would give way at (3), it could encourage selling in this important index.

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Strong markets struggling at breakout levels of late

The S&P 500, Banks, Small Caps and Transportation indices continue to climb higher, as the long-term trend remains up. The two charts below, look at performance over the past month and how each index is testing long-term breakout levels.

The chart below looks at how the above mentioned indices have performed over the past 30-days.

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These key markets are a little soft the past 30-days. The Power of the Pattern below looks at where this softness is taking place.

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Multi-year trends remain up for each of the indices above, as they create a series of higher lows and higher highs.

Each are testing key breakout levels at each (1), where a little softness has taken place the past month. Transports index (lower right) could be creating a pattern similar to what it did in 1999 and 2007. The odds of Transports creating an identical pattern to the 1999 and 2007 highs is low for sure. If Transports would turn weak at (1), bulls might want to keep a tight stop on positions.

Great news for the bulls if these breakout at (1). If they would breakout, each should attract buyers. Bulls don’t care to see weakness start taking place at each (1). Will be very interesting where each of these are 30 days from now!

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Nasdaq & Russell attempting 15-year breakouts, says Joe Friday

The strong rallies over the past several months have pushed each of these up to test 15-year breakout levels. If they do breakout it would be something neither has  been able to do for a long time and would send a very positive risk on message.

Joe Friday Just The Facts; Each are testing breakout levels at the same time. The risk on trade in stocks, would not want to see rising wedge support give way, like both did back in 2007.

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