Transports Moving The Needle:
The IYT keeps chugging right along. It is an important space within the industrials and the ETF is higher 13 of the last 17 weeks and is up better than 1% this week so far too. More importantly the 13 weekly gainers ALL CLOSED in the upper half of the weekly range, a very impressive feat. The rails have been on fire with NSC up another 4% this week, although it did record a bearish shooting star candle. Look to see if there is any follow through in the coming days. The truckers keep hitting the pavement with solid moves from ODFL and KNX Wednesday. The airlines are a bit more subdued as crude continues higher, but there are some leaders setting up. We look at a few in our comprehensive report today.
Deere Is Faster Than A Caterpillar:
Ratio charts are a good way of comparing relationships between market instruments. Below I will take a look at two heavyweights and how they are behaving against one another. One DE can see is breaking to the upside opposed to CAT. On an absolute basis DE is acting much stronger just 2% off most recent 52 week highs, whereas CAT is currently 15% off its most recent peak. The WEEKLY chart of DE looks more visually appealing as well, with a long cup base that began last February. CAT on the other hand had the potential of a nice looking double bottom base, but with the 3% plus loss so far this week, it is looking like it needs to regroup. Today registered its FIFTH consecutive negative reaction losing 3%, followed by drops of 9.1, 7.6, 2 and 6.2% on 1/28, 10/23, 7/30 and 4/24/18.
We always like to mention that leading stocks will often give investors opportunities to ADD on the way UP. I know many traditional market participants like to think the other way around, but averaging up could be lucrative. Remember the best breakout tend to work out right away, and below is an excellent example of this with the chart of UTX and how it appeared in our 4/12 Industrial Report. It took out a cup base pivot of 129.74 on 4/1, and then proceeded to take out the bull flag above 134. On the WEEKLY chart it could be carving out a long 7 month cup with handle pattern. Currently it is just 2 days old and must be 5 days in duration to be considered legitimate.