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Market Notes: Transports Starting To Downshift -- June 23

Jun. 23, 2014 6:06 PM ETYPF
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While most of the major averages were stuck in gear, the market-leading Dow Transport Index (DTX) moved to the downside. The volatility index (VIX) made a valiant attempt to close below 11 but couldn't, confirming a slightly bearish undertone. The nearly dead-even positive and negative VWAPs is indicating that there's not a lot of conviction on either side of the fence, and complacency may be the new world order going into the summer months. Low trading volumes are indicating that the big Wall Street dogs have left for the Hampton's, although nowadays not being connected to your workplace from virtually any inhabited place in the world is no excuse for slacking off.

The number of bright spots in this market is waning but there are still a few areas investors are buying. Oil continues to move higher due to tensions in the Middle East. While many names appear to be over-bought there are a few values still to be had. The one name in this area that shined the brightest today was YPF Sociedad Anonima (NYSE: YPF, $36). This South American oil and gas producer broke out of a six month base on heavier than normal volume today. Volume in this issue has jumped in the past week, an indication of institutional buying. Technically, the stock looks good to go to at least $40 (+12% upside), an area of minor resistance. However, should oil keeping moving up, the stock could easily rally to major resistance at the $45 level (+25% upside). The company's P/E is on par with the industry's average and it does pay a small dividend currently yielding about 0.7%.

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