Trade Idea: (Trend) Transports (IYT) Short

As mentioned yesterday in the Daily Wrap with 4 charts, Transports are and have been looking like an excellent short play up here; a great entry, lower risk and the timing looks to be about spot on.

If I had room to add to the Transports short we already built, I would, but I don't have room to add anymore without violating risk management position size rules.

The charts...

 4 hour long term is even worse than this, but this gives you an idea of what has been happening during the short squeeze recently in small caps and transports which is part of the December 12th forecast, not separate.

 The 60 min chart showing the same negative divegrence through the last move...

And the 15 min chart as well

as the 10 min chart.

As for timing, the faster 5 min has broken free from confirmation and is leading negative. With a rounding top like this a head fake move in the form of an Igloo (the rounding top) with a chimney (the short head fake move above the rounding top) is possible, although an argument could be made it has already happened. In any case, I view this as a long term trending position and I'd set up my risk management to be able to absorb a few impacts or counter trend moves here and there.

The short term 2 min chart for timing also looks excellent.