One of the contextual pieces I follow is trading in line with my primary expectation heading into the week. Here’s the excerpt from last Sunday’s Strategy Session:
Transports could not hold their range last week and instead broke lower. Now we are left to wonder if this index will continue to discover lower prices or if instead it is still balanced but just in a widening range. The bracket low from the prior range still serves as a useful reference point [3431.30]. The expectation now is for any attempt back into this area to be defended by sellers.
Here’s an updated chart of the index, which managed to take out its lows alongside the NASDAQ while on the day, the other indices demonstrated relative strength, see below: