Dow Transports

[Bullitt]

New highs thanks to the FOMO manipulation at reddit. Avis (CAR) was up 108% yesterday as put holders were forced to buy calls to hedge the massive call buying inflows from RH type traders.

At one point Dow Transports were up nearly 15%. This is the type of behavior you see towards the end of a cycle and combined with TSLA's behavior, is something worth noting.

 

[Bullitt]

Dow Transports holding up incredibly well during what could very well be a recession that we're in. We're actually above levels seen in the summer months of 2021 right now.

 

[FireWeatherMet]

Dow Transports holding up incredibly well during what could very well be a recession that we're in. We're actually above levels seen in the summer months of 2021 right now.

What the Transports are saying is that we never were in a Recession, or if we were, it was just a very mild, very short one for just the first 6 months of this year, and that we're now strongly coming out of it...hence the Atlanta Fed predicting +2.5% GDP for this coming 3rd Qtr (Jul-Aug-Sep).
https://www.atlantafed.org/cqer/research/gdpnow

 

[Bullitt]

Transports up 5.5% already this week with strength in airline stocks is helping. Apparently there aren't enough airplanes to keep up with demand - a 180 degree turn from where we were three years ago.

 

[tsptalk]

Huge 4-day rally. Huge month.

Delta and Southwest.

 

[Bullitt]

Still nowhere close a new high in the transports. How can things be so great if the transports aren't participating?

 

[tsptalk]

I mentioned this in Wednesday's commentary...

The Dow Transportation Index is creating an interesting chart pattern. We have a head and shoulders pattern (red) that is following a prior head and shoulders pattern (blue). What those could be are smaller head and shoulders making up a much larger H&S (green.) It would take a while - probably months - for a right shoulder to form, but down the road this could be creating a major topping formation. That would not be good news since the Transports tend to lead the rest of the market. Like I said, it would take a while to form and it could actually move all the way up by 16,200 while creating a right shoulder.

 

[Bullitt]

Great observation. I didn't see those H&S patterns.

 

[Bullitt]

Still going sideways. A break above the right shoulder of around 16,000 would imply new highs. If this rally is as broad based as the bulls are now saying, then this should happen soon.