Dow Jones Transports are blocking a major rally - Dow Jones Transports are blocking a major rally

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Dow Jones Transports are blocking a major rally

"Dow Jones Transports are blocking a major rally" 

in the news Dow Jones Transports are blocking a major rally? What this all about..... See below. 

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Sentiment Trader With stocks pulling back modestly as the S&P 500 and Nasdaq slip from their 7-day rallies, and one index will prove whether the rally still has legs: the Dow Jones Transportation Average.

We can notice that the group has been trading lower since its March 1 peak, which he attributed to the narrowing of the overall market rally as investors move to faster growing stocks.

Looking closely at the stocks that make up the transports index, we found a few key trends.

This is a classic case of the TRANSPORTS lagging, and NASDAQ rallying, but lets face it the NASDAQ is not skyrocketing like it should be. Here is why, you can see it on the chart.

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Other leaders in the group are sparse. Southwest Airlines is up 21 percent on strong execution. Railroad Kansas City Southern and the embattled United Continental were the only other double-digit gainers.

The rest of the group lagged. Most of the airlines offered minor gains of 3 or 4 percent, while truck, freight, and logistics companies like J.B. Hunt and Ryder were down, some with double-digit losses.

"I find the action in this group disturbing, You remove CSX and Norfolk Southern and Southwest and you've got a group that confirms the bond market's advance, meaning interest rates going down, and not the stock market's rally — stocks going up. There are just too many negatives, with a total of eight down for the year. It's not a group that you want to own."

And while it can be uplifting to tinker with the group, replacing Ryder with competitor XPO Logistics for a 30-percent boost or removing rental car player Avis with its 40 percent downturn, the index offers clarity more than anything else.

History teaches us that you can't look through an index like that, and the only conclusion right now is that the Dow Jones Transportation index offers no solace for the bulls and without a re-acceleration, makes you feel that the rally isn't being confirmed by a group that I have always thought has to be appeased if we're going to get another leg up from here.

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Is This Time Different - Is This A Dip Or A Sell Off

Is This Time Different? Is This A Dip Or A Sell Off

Dow down 52 points, but S&P 500 up 5 points — huh? IBM is down over $14, responsible for roughly 100 Dow points.

So what is happening? just yesterday we put out a MAJOR UPDATE to our  VIP SUBSCRIBERS - Download it here!     We told them what we thought is happening on the market. 

spx chart

Everyone wants to know, Is this time different? The meager three percent pullback in the S&P 500 at the end of February made a lot of traders believe that any pullback should be bought, but there has been a lot of discussion this week that this pullback might be different. The following arguments are being batted around:

1) the technicals are worse: this week has seen two days (Monday and Wednesday) where 90 percent of the volume was on the downside on very large volume; this has led many to question whether we are still in an up trend in the markets;

2) the macros are different: March and early April economic numbers (Philly Fed) have been weak (this is becoming a regular Spring event);

3) tech is in trouble; Fairchild Semi and Sandisk had notable drops yesterday, IBM is down four percent this morning on its earning miss, and Apple is at a new low 52-week low.

However, it's a little early to draw any conclusions from earnings, other than tech disappointment. Early bank reports (JPMorgan and Wells Fargo) were good, but Bank of America disappointed, and multi-industry company reports have been mixed. General Electric was fair but CEO Jeff Immelt noted ongoing weakness in Europe.

As of this morning,104 companies have reported (21 percent of the S&P 500), with 67 percent beating expectations — slightly above the norm. Earnings are 2.0 percent higher than the same period last year, with revenue outpacing last year by 3.2 percent, according to S&P Capital IQ. However, guidance has been cautious to

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nasdaq chart update - nasdaq chart update

nasdaq chart update - the nasdaq chart update

Our  > VIP ELITE GROUP HERE  <  know what is happening. Right now there are almost 85% of newsletter writers saying the market is looking strong and healthy, and I can see many more people getting bullish.

As a sentiment trader we like to be contrarian to these views, as last time this happened the market reversed pretty good. So this could be a warning sign. The market right now is a in a real strangle-hold and does not know what it wants to do.

But when we look at the chart we can see, we are still in a bull market. The stochastic are telling us that the bull have gone hard in the short term, and there could be a pullback on the cards soon.

Nasdaq chart

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