Transports Getting Hard Not To Short Here

Transports/IYT have been a core short position (longer term trend) for us with at least two prior entry points. IYT remains as a full size Core short and the tracking portfolio. I had hoped to see a larger bounce from transports to short into or to buy puts.

In fact transports were one of the example assets in this weekend's post, Important Market Update Part 2: The Forecast Plays Out & The Beauty of the Market (just search IYT).

It is very difficult not to Call out transports right now as a short position. For longer-term positions as in the IYT core short opened, this is probably not a bad area. I would specifically be looking for a bounce to open a put position into which of course would be a great area for an equity short as well.

 IYT/Transports (Dow-20) with a clear trend at number one, a break in that trend at number two in the October lows and a definitive change in character at number three which I drew in as a large bull flag with a head fake but it could also be viewed as a large lateral area consistent with a stage III top.

 A closer look at the daily chart including the head fake move below the range the very next day after the April 2nd forecast and the break out of that range with the last three candles including today's forming a candlestick reversal pattern, yet still above the range.

 This is a multi-day (2) 3C chart showing confirmation of the uptrend, a negative divergence in to the start of the lateral trend in 2015 and a leading negative divergence since.

I have little doubt transports are going to enter a primary downtrend, thus they're one of my favorites as a longer term trend position (short).

 The 2 hour 3C chart showing the accumulation into April 2 which is also shown on this weekend's post linked above, however in a different timeframe, and the negative divergence in to the break out above the range.

More confirmation that this is been a head fake move market wide.

 60 min. Showing the accumulation in to April 2nd and again 3C distribution at the breakout.

 10 min

 The more detailed three minute chart showing a accumulation just before the break out above the range (likely specialists) and distribution in to higher prices.

The only reason I'm not calling this out as a short trade idea right now is timing based on the chart below. However I think it is a personal matter in which efficient has to way the timing and possibly a slightly better entry versus the longer term trend. I would probably want at least a partial short position that could be filled out in case we get slightly better prices.

One and two minutes charts are showing weak positive divergences (only 1-2 min intraday charts) so I will wait and set price alerts to see if we get a move higher which I would like to see and expected to see ,to open put positions.