As discussed about two weeks ago, if traders believe in the Dow Theory and its ‘train’ of technical thought which holds confirmation between the industrials (DIA) and transports (IYT) as sacrosanct; bears may be looking to climb on board the market. Despite the DIA setting fresh multi-year highs, the IYT has gone from attempting to break out of a neutral, but bearishly-positioned symmetrical triangle to a quick test of pattern support on Thursday. The grizzly pressure was due largely to a rail-road’ing of sorts from Norfolk Southern’s (NSC) south-of-analyst-views profit warning for its upcoming third quarter.
Figure 1: Dow Jones Transports (IYT) Daily
On the other hand, one chart which was a concern a couple weeks back, but now is potentially trying to bottom, is the world’s largest semi (SMH) outfit Intel (INTC). Since we last wrote about Intel on September 10th in this column, shares have proceeded to move lower on the daily and confirm our prior worries on pending weakness. The good news is that same pressured price action when viewed on the big picture of the weekly chart suggests Intel’s downtrend could be near completion. (more)
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