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No, it’s not what you think.   I’m not packing the goats and chickens (I have a head chicken, I’ll have you know) and donkeys up for a caravan trip to Romania, even though that’s the legendary land that spawned Vlad Dracul.

Otherwise known as “Gapping and Yapping.”   No scheiss, join The PPT and check it out.  He’s the real thing.

No, no plans for Romania, just yet.   Instead my title refers to the oft-promised Dow Theory Analysis of the Transports that I’d mentioned over last weekend.   Despite the hotness of yesterday’s gold pick [[BBA]], I will digress in a wood less traveled by, and momentarily  talk about the Dow Transports and how they are giving us nice signs, despite the prevalent gloom and doom.

The Transports, as I’ve mentioned before, are the key to the Dow Theory.   If they do not confirm, then there is no bear… yet.    And thus far, the Dow Jones Transportation Index [[$TRAN]] has not confirmed a lower low vis-a-vis those February lows which we made on the SPY recently.  Note how the weekly shows the non-confirmation:

As you can see on the weekly, the Trannies have gotten back above that very important 61.8% Golden Ratio Fibonacci Line.   I believe that line will serve as support, even if we enter into a temporary oversold condition here, kudos to The PPT.

On the daily, it’s a similar exercise in rebuilding:

 

We’ve had five days of nice solid recovery, the last two of which have broken that downtrend line with some vim.   Though today connotes a bit of oversold-ness, I’d contend we will find some support on that downtrend line, and better, that the Transports will lead us higher again.

Before you give me a rose tiara and call me Polyanna, please recognize there’s only one reason for the stock market to be rallying right now, and it stems from the sound of that “clacking” that you hear even more disinctly than the Vuvazellas (sp?) contributing to the beehive noises at the World Cup. 

Remember that dollar weekly chart from about a week back?  Well, coincidentally, Old Uncle Green-backs is still following that script… I touched nothing on the narrative here, just updated the chart itself…

I think we’re headed into more dollar doom.  Probably not all at once, but herky-jerky, back down the pike.  That means inflating asset markets, no matter what the CPI says.

Act accordingly.   And for goodness sakes, get into The PPT so you can tell your grandkids about saving their college tuituons.  Best to you all.

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UPDATE:  Drunken Dem Congress Critters Gone Bad!!   Time to Retire This Fist-First Nut,  Tarheels:

[youtube:http://www.youtube.com/watch?v=_oqIP9yagkQ 450 300]

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I haven’t time and there’s no explaining, Lucy.  Let not your heart be troubled by my tribulations, as they number among the Blackberried.

Let it be known that I hate switching servers, but not my fellow man, even as he deserves it, verily.

Wow, chip and merrily, I cannot get over the stalwarts today. First, let’s look at the banker’s weekly on the [[BKX]] :

Robusto, no? You know what they say about robust banking stocks, yes?   Now look at the Trannies, Granny:

 

 

Voila!  Not only have you the perfect sell data, but you can take the bus to the bank as well.   It helps if your eyeliner is smudgy, but barring that, keep your eye on the above two indexes and above all watch [[UUP]] and DXY.  

Bless us all, everyone.

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Bonus track!  Testamentum Eternum!

[youtube:http://www.youtube.com/watch?v=74d3gWJOV-4 450 300]

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Yeah, we’re going to flush to the terlet here, with this Goldman Kabuki going on.   And now Merrill is getting into the act, too. 

Big whoop.  Like it’s a shocker that losers are going to try to blame someone else for losing money?

It’s the way of the world.   Blame someone else for your stupidity.   Tell me one thing, though… if you went to that Goldman Sachs trading room back in 2006, how many geniuses on that floor would’ve been betting on John Paulson? 

Yeah, that’s what I thought.  Not even Timmah was betting with Paulson back then.   Hindsight being twenty-twenty, though, let’s throw them all in jail now.   I’ve been in this business 20-years and I could’ve been in it 200… the story remains the same.  Chock full of losers looking to blame someone else.  Step off and take responsibility for your decisions.

Or just get the hell out.

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Meanwhile, Transport leader and king United Parcel Service, Inc. [[UPS]] made a giant move last week and only pulled back a little off of it with Friday’s mess.   Recognize, I believe it will pull back more with this long expected blow off we have expected, and we should experience more of this week.    But I also think it shows we’ve got more to go in this retardiculous (sic) market runup into the 2010 elections.  

Here’s where I think the buypoint for UPS should be:

This should also become a signal to you of when the market as a whole will begin to recover.  The Transports always lead, Charles Dow has yet to be wrong in over 100 years, and he’s been my sherpa for some of the worst market conditions we’ve experienced since the Depression.  

Put your faith in Chuck, watch United Parcel Service, Inc. [[UPS]] and look for gold and silver in extremis.  

My best to you all.

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                           Nom Nom Nom
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Here’s why I’m eating sammitches.  Watch that dollar, it’s still overbought… and I can’t tell if the Trannies, and especially United Parcel Service, Inc. [[UPS]] (their leader, as I’ve mentioned), is leading the SPX, or vice versa.

FWIW, it’s supposed to work — according to Dow Theory — with the Trannies leading.   Let’s see what we can see on a weekly basis.   First SPX, looking very indecisive:

Now, have a look at United Parcel Service, Inc. [[UPS]] , which has shown great relative strength these last few weeks…

And last, most curious of all… the Dow Jones $TRAN Index  itself … curiously, already above its 200 week -EMA.   To stay?  I know not… hence, my sammitch eating:

I hope to have more tomorrow for you… including a closer look at the dollar, which remains ridiculously overbought.   I am staying with everything as of this evening, however, including [[TBT]] and all my $HUI friends.  

Best to you all.

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Lot’s of comments,  and I’ve annotated some charts, but I don’t have time to fill in the commentary yet, so I’ll just throw the charts out for now.   Many of them are self explanatory… “developing…”

Markets via the Transports, daily:

And weekly, with the Fibs:

 

 

Now our $HUI— daily:

And the weekly $HUI:

Last, the Jacksonian Results as of Friday:

Name	18-Jun	19-Jun	% Change		Comments
ANDE	$   28.18	$    28.61	1.53%		Still in consolidation here. Break now $28.15
EGO	7.97	8.20	2.89%		Support @ 8, bizarre final 1/2 hour.
GDX	37.20	38.39	3.20%		Nice EOD action.
GLD	91.60	91.90	0.33%		POG flat, like all week.
IAG	9.10	9.36	2.86%		Never got below $9.  Odd last ten minutes
MON	82.30	80.73	-1.91%		A pox on Cramer. Nice final 45 min.
NRP	21.95	21.99	0.18%		Back above trend for now.
PAAS	18.59	18.93	1.83%		Nice volume today.
RGLD	41.98	43.08	2.62%		Still on trend.
SLV	13.97	13.99	0.14%		POSilver @14.23, inside day
SLW	8.30	8.63	3.98%		Triangle forming, up off the floor?
SSRI	18.13	18.92	4.36%		Nice move, but EOD red candles again.
TBT	55.76	54.34	-2.55%		Not yet filled gap @ 54.20 yet.
TC	10.50	10.54	0.38%		Flat again.   Watch for break.
TCK	16.28	16.54	1.60%		Consolidating.
AVG (daily)			1.43%
AVG (monthly)			-7.15%
AVG (inception)			15.55%
Cash ( 000’s)			$       4.61

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Before you all get all loose wheeled and boot-rollicky because Timmah Geithner decided to extend the last few remaining TARP nickels  to carnival midway operators, portable potty lessors and, oh yeah — bullshit life insurance companies, let’s keep in mind it’s the Transports ($TRAN) that run this market.

And the Trannies look a little ailing …or to be less dramatic — fatigued:

Note how we’ve broken through the 20-day EMA that’s been support since the March lows?    After such a massive (9 week run) a pullback here to the 50-day EMA would not be unusual and in fact is a healthy circumstance… if  it’s just a pullback to the 50 day EMA.   Anything further and we could be talking a wholly different Devil Dawgian scenario.   

But   for now let’s let the Zone of Indecision be our guide since it so fits with our EMA’s and support levels.   Below that level, there be dragons I fear.    

The weekly $TRAN chart gives me pause too.  Check out this bearish engulfing somnabatch:

And right off the 34-week EMA too!  I expect we should flirt with that support level at least, and if we break through it, it could get far nastier.   I have already hedged my largest transport position — UPS, but in the event of a break of that support at around 2900, I will be getting short in everything save the Core Porfolio in a much larger manner.

Now let’s look at the $SPY weekly chart one more time for synthesis:

As expected we did pause in that 940-950 area, and are in fact retracing to what looks to be the 13-week EMA, which has been support for almost six weeks now.  Whether we head back to our second target zone (in the 1010 area) will depend on the bounce, or lack thereof, left in the 13 week EMA here.  

 Personally, I think we head back up one more time after a pause, but that’s almost as instinctual a call as it is a chart reading one.    In any case, we can continue to use the reliably signalling Trannies, as well as the above $SPY weekly, to provide us a rough guideline for the weeks ahead.  

Happy Preakness, and Victoria’s Day to our Northern neighbors.   I should be back tomorrow with a weekly update on the Core.   Best to you all.

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