TRAN (DJT) Dow Jones Transportation Index Daily Chart; Trannies Down -12% in 2 Months in a Correction; Dow Theory Malaise

The trannies (TRAN; DJT) are going down at the stock market party. That can mean different things nowadays. The Dow Jones Transportation Average collapses -12% over the last 2 months now in a correction (down more than -10%). The IYT tranny ETF is down -14% in the same time frame heading towards a bear market (-20%).

From a Dow Theory perspective, the falling trannies, confirmed by the falling Dow industrials, forecasts doom and gloom ahead for the stock market. That said, note that price is using the 200-day MA at 14755 as support over the last few days. It would be a big deal if it failed. However, the chart indicators are positively diverged (green lines) as price prints a matching low. This tells you that the trannies want to bounce from here in the daily time frame.

However again, if you bring up the weekly chart, you can see that the indicators are weak and bleak wanting lower lows in price on the weekly basis. Thus, trannies should bounce anytime and establish a few-day rally but then will roll back over on the weekly basis and continue the multi-week down move with lower lows in prices ahead.

IYT price has not yet come all the way down for the matching low so if you want to play a quickie long, wait for that to happen to confirm the possie d and that the bottom is in on the daily basis. Price will rally so you can make some dough but do not marry the position, get out of it as soon as it gives you some profit since the IYT weekly chart remains weak and bleak like the TRAN (DJT) chart.

IYT is trying to hold the 50-wk MA support at 231. It would be a big deal when it fails. IYT sits at 231 now so it has to make a bounce or die decision from this price support. Keystone is not holding any positions long or short in the trannies these days. 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.