Short Term Trading Member Forum

[techcharter]

DOW Transports

I came across this report by Sy Harding "Transportation Stock Breakout Is a Good Omen for Economy". Using Elliott Waves I come to a completely different conclusion.

http://www.financialsense.com/contributors/sy-harding/transportation-stock-breakout-good-omen-economy

Harding's timeframe of interest is 2011 and 2012. In both the SPX and Transports, the rally off the 2011 low to early 2012 high is a zigzag. This is NOT the pattern of a breakout rally. The rest of 2012 the transports was in a triangle, also NOT a launchpad for a sustained rally.

When I look at the Transports on a 20 year timeframe, I still see no major rally in the future. Starting in 1998 there was a 5 year, WAVE 4 triangle. That means there is only one more wave UP of the same degree. Starting in early 2003 I see a 10 year, well defined, HUGE ending diagonal that could top any day. Even though I strongly disagree with Harding's analysis, he has helped me reduce my time searching for a high probability, low risk short set-up.

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=djta&time=20&startdate=1%2F4%2F1999&enddate=1%2F13%2F2013&freq=2&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=9&x=54&y=16