Trade Idea: Transports

I have a really hard time believing the fundamentals of transports are firm, I think if anything lower oil prices over the last 3 months (If you are long USO, pay attention) probably has more to do wit it and probably even more importantly is the Technical Analysis theme of confirmation between industrials and transports confirming which was great when we an industrial nation and a railway nation, but that old theme that so many technical traders still look for (confirmation between the Dow Industrials and Dow Transports) is not only antiquated, but a perfect example of how Technical traders refuse to think independently and follow what they've memorized from hundreds of TA books rather than truly understand the "Why?".

In any case, I've noticed for a long time, if the market wants to sell a move, they push transports as well. If you really want to create a pair of indices to confirm along those lines, I'd prefer something more like FEDX and Russell 2000.

In any case, I think Transports are getting very close to a position and with USO finally making its turn to the upside we've been expecting, it should be helpful in establishing a short in transports, which I'd prefer to be a broader short like IYT. *USO charts coming*

 The daily chart is showing diminishing volume, of course some of that is seasonal, but not all, it goes back a bit further than just the last week..

Today's closing candle is a bearish "Shooting Star-like" candle, not quite textbook, but again, the psychology of the candlestick still remains.


 The 60 min chart and those regions in which we have a breakout and near pure distribution on the breakout. I wish I had written down the exact prices where distribution occurs because you can see on other charts it's in the same area.

 For instance the 30 min chart, near pure distribution on the same breakout in which we see distribution at the same breakout level on the 60 min chart above.

 The 15 min chart, near pure distribution at the same breakout level. This is a theme constant throughout the market.

The 10 min chart just shows it getting more intense recently.

As does the 2 min and...

The 1 min is VERY clear.

With a position like this, I think IYT short can be used, I don't think options are necessary unless a really beautiful options set up turns up.

 I'm thinking let the 60 min X-Over chart go to a sell/short signal, let DJ-20 or IYT then bounce back up to the 10-bar yellow moving average and as long as 3C confirms, make that the short entry, a stop can be placed either above recent higher or above the blue 22-bar moving average and you have very little risk.

The 2-day Trend Channel is a bit too wide and the 1-day Trend Channel was stopped out once, so a good mid point would be around the $7100 point, I'm thinking by the time the X-Over screen set yup the trade, we'd be in that area any way and that would likely be a very high probability entry, low risk and good timing.