UNP Could be a Catalyst for the Transports in 2020


  • Transports continue to lag...and remain range-bound.
  • They also remain 8% below their 2018 all-time highs.
  • 11,000 and 11,500 are the two resistance levels to watch.
  • A breakout in UNP should be a positive catalyst for this group.


The transportation stocks have been lagging the broad market for most of this year. If 2020 is going to be another good year for the stock market (like it frequently is in an election year), the DJ Transportation Index is going to have to play catch-up.

We were asked by CNBC to touch on the key levels to watch on the TRAN index for signs that it is indeed going to regain its lost momentum. We were also asked if we liked one name that could provide a catalyst for the sector. (You can see the video of interview from this afternoon below.)

In the interview, we highlighted two levels for the TRAN. The first one is the 11,000 level. That is the upper-end of the sideways range the transports have been trading in for over ten months now. A break above that range will indeed be positive, but we'd still have to see it rally further and break above its all-time highs from 2018 to confirm that a breakout has take place (and to give us a "Dow Theory buy-signal").


As for an individual stock, I chose Union Pacific (UNP). It's all time high of $180 has provided VERY stubborn resistance for the stock since the spring. It has tested that level three different times, but has failed to break above it on all three occasions. Therefore, if it can finally break above $180 in any meaningful way, it's going to be very bullish for UNP on a technical basis. Since the S&P 500 Railroad is not all that far from its ...

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(Quick) Midday Comment: Last Hour Will Be Important Today


The last hour of trading has always been important, but it should be particularly important today.

The S&P 500 has not closed at or near its lows for the day very often at all since the October lows. In fact, ...

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Morning Comment: Keep One Eye on German Bund Yields


There are several reasons why long-term Treasury yields remain low. One obvious reason is the slowdown in growth we've experienced this year...both here in the U.S. and around the globe. However another reason is the ultra low level of interest ...

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Home Depot: Poised for a ST bounce (& maybe a LT rally).


Home Depot (HD) has become very oversold on a short-term basis. A 9% decline in less than a week has taken its RSI chart on HD to an oversold level...at a time that it is also testing its trend-line from ...

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Morning Comment: Michael Bloomberg's Chances are Quite Good


  • Our record on Presidential Elections predictions is quite good.
  • NYC Mayors have a LOUSY record winning higher office.
  • However, Mr. Bloomberg definitely has a lane for success.
  • Enough people want Mr. Trump's policies without Mr. Trump.
  • Two dozen "open primaries" ...
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THE WEEKY TOP 10


THE WEEKLY TOP 10


Table of Contents:

1) The market acts great, but it’s also getting expensive, overbought and over-loved.

2) The key tech ETFs…& several key tech stocks…are beginning to show some cracks.

3) Ditto for the high yield ...

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What the hell is going on with AMD today???


Although I frequently like to send out notes that give both sides of the bull/bear ledger on a given situation, I almost always take a definitive stance on which side of that ledger I stand at any that time. I ...

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Morning Comment: Nobody is Selling!!!


  • Never short a dull market...especially when nobody is selling.
  • However, can the next 6 weeks be anything like the past 6 weeks?
  • If it is, sell everything at the beginning of the New Year...because the market will be ridiculously overbought ...
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Morning Comment: Goldman Sachs (GS) testing KEY resistance


Despite the way it might have seemed, the stock market had really be trading in a relatively tight sideways range for the past two weeks...until Friday. Since the past two week had followed a very nice (6.6%) rally, Friday's nice ...

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The Weekly Top 10


THE WEEKLY TOP 10


Table of Contents:

1) The stock market has already priced-in a “Phase One” deal.

2) Earnings growth (and future estimates) do not justify this level in the stock market.

3) We’re seeing small (repeat, small) cracks ...

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Morning Comment: Trade deal already priced-in....AAPL due for a drop.


  • We're close to a trade deal....again.
  • Any deal will be a much smaller one than the one they were "close to" back in April...when the stock market was more than 5% lower.
  • Will Hong Kong cause a deal to fall ...
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Morning Comment: Phase One Deal Priced-in....AAPL Quite Overbought



In our opinion, both the U.S. and China want and need a “Phase One” trade deal…and thus one will be signed in the not-too-distant future. Not only do both side want and need one, but a significant break-down in the ...

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