IYT/ Transports Trade Set-up

The last time we entered IYT (short) the divergence setting up the downside turn was very quick, at least the tactical timeframes, the strategic had shown damage ever since Transports saw an increased rate of change in upside price movement which often precedes a downside reversal even though it appears to be a very bullish event.

I'm very close to pulling the trigger here to fill out the IYT partial position which has room for about another 1/3rd addition.

Here's the initial position entered and held since the last top.

Even with nearly a full retracement of the July decline, the position has held up well because of a good entry for the first portion.

 The intraday chart is falling apart in to the last 2-days , many of the watchlist stocks have a similar appearance today.

The 2 min chart is going negative in the same area,

As is the 3 min chart which shows the exact same base area as the broader market, August 1 through August 8th.

The 5 min chart shows the trend of underlying trade during this bounce which is what the broader market shows as well.

And the 15 min chart would be the bases's positive divegrence for the bounce, again from 8/1 through 8/8 with recent deterioration like we are seeing in the same charts for the major averages.

 The stronger charts which don't show the same divergence (positive) as it was not strong enough to show up on them , shows the very fast deterioration of the last top when we entered, I believe there were only a couple of days before it turned down, much sharper than typical reversal events. The 3C posture here is in even worse condition.

The 60 min chart shows transports in line as price's ROC to the upside increases, again this seemingly bullish event often leads to a much bigger top/ reversal. Again, 3C is in worse position on this second near double top.

It's the strategic 4 hour chart that shows the long term underlying trend which deteriorates badly as the increase in upside price ROC begins (the steeper second trendline on price). This is the highest probability intermediate to primary trend resolution or in other words, a bear market.

I'm tempted to fill out the position here today, however, the concepts we have learned over the years would suggest the highest probability would be for a head fake/failed breakout above former highs or a failed breakout from a double top.

Since I don't have any daily bearish reversal candles in place yet and the head fake area is so close, I'll set DJ-20 price alerts for a break above $8515 and look for my entry at that level.

However as a longer term investor./trader, I don't think an additional +.005% is really that big of a deal over the longer haul, it really only matters to me for the purpose of timing.