Me? I'm taking the Dow Jones Transportation Average. It's an index of the average stock prices of 20 transportation companies and it's been the true leader of the market since before the original technical analyst Dow himself was around. This is price analysis. I believe there's no better indicator than price, time, and volume. All the other indicators are based off these three variables. So why get the info second hand when you can get it right from the horses mouth? The transports have to be doing big business for the economy or the market to do good. For you to buy something it has to be shipped. After you buy something it has to be shipped. If nothing is shipping or if the anticipation of nothing shipping is prevalent the market will almost always go down.
I say almost because nothing is full proof. Especially in this world of full scale manipulation. But if you look at a daily chart of the transports and the $spx you see a clear divergence. Here's both charts:
This whole bounce off the bottom was on QE hope. I should know because I hoped for QE myself and traded off the expectation that everybody else would either hope for QE or hope they weren't short when more QE came. But the transports never confirmed that hope. Technical analysis is built on the assumption, or certainty I should say, that there are highly informed traders and investors out there that are way smarter than you and I and have way more money than you and I. They buy or sell first and we follow. They leave clues on the charts and we FOLLOW.
Using the Dow transports is basic Dow Theory. Google Charles Dow or Dow Theory if your unfamiliar with him. 100 years ago dude saw this and shared it with us and to this day it still rings true. That's what I call G shit...
Until next time be careful out here traders and happy hunting!