Trading Strategy – iShares Transportation Average ETF

One of the more noteworthy developments in recent days has been the move in transport.  After a strong run of outperformance in late August 2017, the iShares Transportation Average ETF (IYT) topped out in mid-October and trended steadily lower.  The ETF fell 1.2 percent, bringing its 2017 gains down to just over 8 percent, trailing the S&P by almost 6 percent.  Now the question is whether this is a pause that refreshes or it’s a beginning of something worse.  Below is an update look at a trade in the IYT.

The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges.  As shown, the underlying is in a short-term bullish trend when the price bars are painted in green.  The underlying is in a short-term bearish trend when the price bars are painted in red. 

Chart 1.1 – iShares Transportation Average ETF (daily)

Our “U.S. Market Trading Map” painted XLP bars in red (sell).  After peaking at 181.57 in mid-October, IYT rolled over.  Wednesday’s massive selloff pushed the ETF below the 20-day moving average – the level that offered support in the mid-October correction.  This is a bearish development because it’s indicated that more supply is coming into the market…Click here to read more.

You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.


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