After a meteoric rise out of the 2020 coronavirus crash lows, the Transportation Sector ETF (IYT) has stumbled and bumbled.
Better said, the Transports have been a major laggard of the broader market.
As you know, the transportation sector is a key cog in the economy so this divergence is worth monitoring… and especially right now!
Today’s “weekly” chart of the Transportation ETF (IYT) illustrates an important trend-line support marked by (1). This trend-line previously served as overhead resistance before $IYT broke out above it.
That breakout lead to several weeks of new highs (and eventually a trading “high”). Since that high, $IYT has fallen into a downtrend and fallen back to that key trend-line – now support – marked by (2).
What this weak sector does at (2) will send an important message to the broader market! It is trying to bounce off support here… will it hold or breakdown? Stay tuned!