TRAN Transportation Index Trannies Daily Chart H&S

The Trannies ran higher today jumping 3% but it was not enough to place a closing high above last week's high. Nonetheless the move in the Transportation Index is phenomenal since Christmas.  The teal lines show the overbot conditions, rising wedge and negative divergence causing the spank down. The red lines show that more weakness is desired but Chairman Bernanke's printing press is a powerful force. But, is is all the chicken and egg argument?  Did the Trannies move wildly higher the last two months due to the Fed's easy money causing a joyous wide-based economic recovery, thereby increasing the attractiveness of the transportation stocks, or, did the Trannies simply move up since the easy money needs to go somewhere and traders figure if the economy was to recover, the Trannies would provide leadership, thereby the move higher for two months is simply free and easy money being stuffed into an overstuffed pig? That is a good one to ponder.

The move today provides a right shoulder for the brown H&S; head at 6020, neck line at the 5780 support, targets 5540 support if the 5780 fails. Projection is sideways to sideways down moving forward. 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.