I am going to get “Very Picky” on the Transportation ETF (IYT).  Doji star or engulfing bear patterns, can often signal highs in any asset, especially at market highs or at resistance.  

The above chart reflects a “Doji Star” pattern back in 2007 at (1), resulting in a 25% decline in a few months.  A “Engulfing Bear” pattern took place at (2) in 2008, resulted in a 65% decline. A Doji took place in 2011 at (3), resulting in a 30% decline.  Each of these declines impacted the S&P 500.

This past week another Doji star pattern took place at a resistance line, where prior declines got started! Trucking index took a leadership role breaking down prior to the  500 index back in 2011, it is breaking down again! (see post here)

Could last weeks “Doji Star pattern at resistance” reflect a decline of at least 25% in this key transportation ETF is about to take place? Will it be different this time?

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past