TRAN Transportation Average Daily Chart Sideways Symmetrical Triangle

The Dow Theory non-confirmation continues. The Dow Industrials are up, up and away recently but the trannies languish sideways, now moving into the apex of a sideways symmetrical triangle. Note the moving averages that are all lining out sideways. The indicators are funneling in sideways as well although money flow has perked up over the last couple days.  Price is bracketed by the 200-day MA at 5103 above, and the 20-day MA at 5060 below. The weekly chart price action is bracketed by the 20-week MA at 5124 above, and the 50-week MA at 5019 below. Thus, a gauge of price direction, using the moving averages as the guideline, would be 5100-ish above, and 5050-ish below. If price moves above 5100, bulls are favored moving forward and the market rally will develop legs. If price drops under 5050, bears are favored moving forward and the non-confirmation signal is real, and the broad indexes will weaken and head lower.

The moving averages provide a near term tool to gauge direction but focusing on the sideways triangle above, a move above 5100 is a breakout. Considering the 500-point vertical distance of the triangle, 5100 and higher will lead to 5600.  If the price action deteriorates and TRAN collapses out the bottom rail at 5000, the lower target will be 4500. A flattening and negative move in the 200-day MA slope will indicate market sickness ahead but if the 200-day MA can continue higher that will show that the bulls win.  In a nutshell, a move above 5100, is very bull market friendly. A move under 5050 signals that the bears are pushing hard, and if 5000 fails, that is very bear market friendly. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.