I have created a video recap for today's daily; the link to watch is below.
Transportation stocks are an excellent measure of industrial and manufacturing strength and supply and demand. In this video, I discuss the Transport (IYT) ETF, which is a good indicator of economic health, as the movement of goods and services across the country is the economy's lifeblood. This relates to Charles Dow and his emphasis on tracking transportation to gauge the economy's health. We can use IYT to see if goods are moving or not. And in a strong economy, we don't want to see supply outweighing demand.
The ETF Basket Broken Down
Generally, transportation companies are busier when economic activity picks up, leading to strong demand for the movement of goods across many economic sectors. When economic activity increases, transportation businesses are often busier, which fuels significant demand for more commodities across various economic sectors. When the supply of goods outweighs the demand, that's a sign that the economy is slowing down. But when demand outweighs supply, that signifies a strong economy. IYT is a great way to measure that relationship and better understand where the U.S. economy is heading.
So if you want to learn more about how the Transports can be a good indicator of financial health, click the link below to watch my video recap.
Click here to access the video of Mish, Transportation (IYT) and her chart analysis.
Also be sure to watch today's clip on Bloomberg TV below!
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Mish in the Media
In this appearance with Caroline Hyde on Bloomberg TV, Mish covers rates, the dollar, commodities and key market sectors.
Check out Mish's latest article for CMC Markets, titled "Droughts Take Toll, But Trading Opportunities Haven't Dried Up."
- S&P 500 (SPY): 399 major support, 410 pivotal, 417 resistance.
- Russell 2000 (IWM): 190 pivotal, 182 major support, 195 resistance.
- Dow (DIA): 320 major support.
- Nasdaq (QQQ): 312.50 pivotal, 303 major support and 319 resistance-clutch hold of the 50-DMA.
- KRE (Regional Banks): 62.00 the 50-DMA.
- SMH (Semiconductors): Unconfirmed bear phase if cannot retake 223.50; 215 next support.
- IYT (Transportation): 227 the 50-DMA. 234 area pivotal, 240 resistance.
- IBB (Biotechnology): Confirmed bear phase. 124 resistance, 117 next support.
- XRT (Retail): 64.25 area the major 50-DMA support and 67 resistance.
Director of Trading Research and Education