Seeking Alpha
  • Michael A. Gayed, CFA
    For those worried about the Transports (IYT), I recommend reading http://bit.ly/ywneAh - may be a false signal.
    2/22/12
    Reply (19)
    • nasalpancho: Change is A Comin' Mr. Gayed.
      2/22/12
    • Conventional Wisdumb: So you are recommending that people buy transports, is that correct?
      2/22/12
    • Michael A. Gayed, CFA: No where did I state that. I am suggesting the idea that Transports are signaling a decline could be false.
      2/22/12
    • nasalpancho: It could be true too lol -- either it is or it isnt .. are you saying its false?
      2/22/12
    • realornot: Transport is very important for a strong bull case.It cannot be a lagger for a strong economic recovery.Not a false signal.Will C by Summer
      2/22/12
    • Josh Krause: So by your logic we were a'ok in July 2011 when the ratio started to plummet like it is now?
      2/22/12
    • Michael A. Gayed, CFA: As I alluded to, no other sector is confirming Transports weakness as a bearish indicator yet. In July 2011, there were other confirmations.
      2/22/12
    • nasalpancho: XLF & IWM havent weakened over the last week?
      2/22/12
    • Josh Krause: I can think of a few others recently. IWM and XLF have been lagging significantly. Nasdaq has gone from leading to lagging significantly.
      2/22/12
    • nasalpancho: QQQ which led us up hasnt started to underperform?Could be a headfake certainly but there are signs to be seen that a correction is imminent
      2/22/12
    • Michael A. Gayed, CFA: XLF and IWM have weakened, EEM has not, and XLU, XLV, XLP still look like laggards. TIP beating IEF. Still bullish signs.
      2/22/12
    • Josh Krause: So we've gone from full on bullfest to a more evened out indicator spread? Sounds like topping action to me.
      2/22/12
    • Conventional Wisdumb: " I am suggesting the idea that Transports are signaling a decline could be false." I don't understand the point of your article then
      2/22/12
    • Conventional Wisdumb: because the only way this would change is if transports rise so that the false signal goes away.
      2/22/12
    • Michael A. Gayed, CFA: No, it could be resolved by being down less as well. Strength comes from bring up more/down less.
      2/22/12
    • Conventional Wisdumb: So how do you invest on this idea then? I am totally confused.
      2/22/12
    • Michael A. Gayed, CFA: The argument being made by the media is that weak Transports means the broader stock market will decline. I am suggesting the opposite.
      2/22/12
    • Conventional Wisdumb: so then it's a buying opportunity? I read your articles but I am beginning to wonder why. thanks for responding.
      2/22/12
    • UnderCover Jellyfish: I'm not worried about transports I am worried about oil.
      2/23/12
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