Transports, Dollar, Metals, & Oil Are All At Critical Levels Right Now

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February 4, 2017 7:52am NYSE:IYT

NYSE:IYT | News, Ratings, and Charts

From Taki Tsaklanos: There are moments in the year which are more important than others. That is true in markets as well. Right now, several leading markets are trading at major inflection points, and that suggests it is one of those few moments in the year that investors really must pay attention.


InvestingHaven’s research team suggests that a new primary market trend could arise depending on what leading markets will do around inflection points. Note that investors should not look at one market only, but at the combination of all leading markets and the collective direction(s) before coming to conclusions.

First, the transportation index is near all-time highs. As seen on the first chart, this is a major resistance area. What happens with the transportation index will have major implications on the stock market as a whole.

transporation index - inflection point

Second, the US dollar is testing its breakout point. The dollar broke through major resistance in November last year after 3 failed attempts in 2015/2016. This breakout could have MAJOR implications for markets: bearish for commodities, gold and currencies. Right now, the dollar is trading exactly at major support.

dollar - inflection point

Third, base metals arrived at major resistance as well. Base metals are a strategic asset, and they are watched closely by all investors in order to get an idea of the health of the economy and the value stock market segment. If they fail to move higher, it would raise a red flag.

base metals - inflection point

Next, crude oil, without any doubt the leading commodity globally, is struggling to move higher as it entered a major resistance area. Although it seems to be consolidating, it clearly lost steam, and investors are doubting whether that is bullish (preparing a new move higher) or bearish (resistance being too strong). It is too hard to make a forecast at this point, investors should let the market do its work.

crude oil - inflection point

Last but not least, gold is trading at an important trend line. InvestingHaven’s point of view is that gold will only enter a bull market once above $1350. A move above $1220 would suggest a tactical bull market, not yet a structural bull market. If $1220 does not hold, gold will be eyeing $1000.

gold - inflection point

Investors should watch closely what happens with all 5 leading markets collectively which are discussed in this article in order to get an idea of the next major move(s). That is what intermarket analysis stands for and why it is so important.

The iShares Dow Jones Transport. Avg. ETF (NYSE:IYT) closed at $166.34 on Friday, up $2.49 (+1.52%). Year-to-date, IYT has gained 2.15%, versus a 2.60% rise in the benchmark S&P 500 index during the same period.

IYT currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #7 of 32 ETFs in the Industrials Equities ETFs category.


This article is brought to you courtesy of Investing Haven.


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