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DJ Transportation ETF IYT: Divergence Prevail?
 August 27 2017 ( From TradingView )
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The Situation

​​We just start to realize how quick the reaction of the Financial Markets after
​the US Election on November 8 2016​ (what I call the Trumpification with a
​pro-growth and reflation theme within a protectionim bias). From closing price
​made ​on November 8 2016 on the Dow Jones ​Transportation Average ETF IYT
(iShares Transportation Average ETF) at 149.74, to the closing high of 175.40
on July 14 2017​, a gain of +17.1% (excluding dividends); for the SP500 Index
​(SPY ETF - November 8 2016​ closing price of 214.11 to August 7 2017 at 247.87
​for highest closing price), it was a gain of +15.8%.​

It seems looking at the weakness of the US Dollar Index since mid-May 2017
​that it is fading tremendously what I call the Trump effect on financial markets.
It is a strong message of losing confidence towards the US in general...​


​​And the Mighty Dow Jones Transportation Average Index ETF (IYT) is keeping the same message for awhile as it keep underperforming other Major Indices that puzzle me tremendously. 

Here is some Technical Observations:​​​

​1) From the highest price reached on August 8 2017 for SPY ETF to the closing reached on August 25, it was down by -1.7%; IYT ETF  under performed with -6.4% from its previous high reached on July 14 to the closing made on August 25.  (See first chart below)

​​2) Few of us realize that the IYT ETF already broke in August 2017 a Daily Support Trendline that started on June 24 2016 (See first chart below - Yellow trendline)​ and the SPY ETF is far from breaking it. So a lot more volatility lately for the Transportation Index than the SP500 Index...

​​​​3) On August 25 2017, IYT ETF closed -0.9% below the 200 DMA (Day Moving Average) ​(See first chart below - Green line)​  but SPY ETF still +3.9% above its 200 DMA.

​​​​​​​4) ​​On a relative basis (the ratio of Dow Jones Transportation ETF IYT ​to the Mighty Dow Jones Industrials ETF DIA) we peaked on December 8 2016 and are within a Daily Downtrend Channel. ​(See second chart below - Grey Trendline)​ We keep making lower highs and lower lows on that ratio, nothing technically bullish there. We are now getting near the Major Support Trendline, the last call for Bulls on a relative basis.
​​(See second chart below - Blue Trendline)​

​​5) ​​Almost the same battle with the Mighty SP500 Index on a relative basis. The ratio (Dow Jones Transportation ETF IYT ​to the Mighty SP500 Index ETF SPY) keep making lower highs and lower lows and is into a Daily Falling Megaphone pattern. (See third chart below - Red Trendlines)​ .
​And looking at Monthly charts on those ratios, the trend is even more obvious.
(See fourth and fifth charts below)


​As the ​​​​​Mighty DIA ETF got way over the previous peak reached on August 8 2017 (with a Daily Shooting Start Candle) , the Dow Jones Transportation ETF IYT ​failed to reach yet the previous peak of July 2017; it is still into a lower highs and lower lows technical pattern, a completely different pattern than the SPY ETF and the DIA ETF.​​​

​​But most importantly, what puzzle me the most is that, that Big Divergence continue to prevail between Dow Jones Transportation the Dow Jones Industrials (See six chart below) and the Mighty SP500 Index.

​​As the keep underperforming lately, it become a serious warning from the Dow Theory.






​​




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Charles Dow
DJ Transportation ETF IYT: Divergence Prevail?  $DJT, $SPY #investing #dowtheory #SP500 #dowjonestransport

Dow Jones Transportation ​ETF IYT
​( Daily Candles )
​20 DMA ( Day Moving Average - Yellow Line )​
50 DMA ( Day Moving Average - Red Line )​​
200 DMA ( Day Moving Average - Green Line )​​

Financialiceberg.Com
Financialiceberg.Com
Daily RATIO ( Candles )
Dow Jones Transportation ​ETF IYT 
over​
​Dow Jones Industrials ​ETF DIA
20 DMA ( Day Moving Average - Yellow Line )​
50 DMA ( Day Moving Average - Red Line )​​
200 DMA ( Day Moving Average - Green Line )​​

Daily RATIO ( Candles )
Dow Jones Transportation ​ ETF IYT
over​
​SP500 Index ​ETF SPY
20 DMA ( Day Moving Average - Yellow Line )​
50 DMA ( Day Moving Average - Red Line )​​
200 DMA ( Day Moving Average - Green Line )​​

Financialiceberg.Com
Monthly RATIO ( Candles )
Dow Jones Transportation ​ETF IYT 
over​
​Dow Jones Industrials ​ETF DIA
Monthly RATIO ( Candles )
Dow Jones Transportation ​ ETF IYT
over​
​SP500 Index ​ETF SPY
Dow Jones Transportation ​ETF IYT ( Blue Line)
Dow Jones Industrials ETF DIA ​​( Daily Candles )

Financialiceberg.Com