With today's 1.38% decline, the Dow Jones Transportation Average is now down 3.49% from its all-time record high as posted just 5 trading days ago on July 23rd. And as incredible as it sounds, another drop of just 15.33 points (or -0.19% to negative on the month) will trigger a monthly chart sell signal in my computer trading system. As can be seen below, monthly chart signals in the DJTA have been fairly reliable over the last 18 years.
A monthly chart sell signal was triggered in UPS today! Please see chart below. This monthly chart sell signal in UPS is the first sell signal ever recorded by my computer system in UPS since it went public in November 1999. While index chart signals are generally more reliable than individual stock signals within my computer trading system, this monthly chart sell signal in UPS looks very strong to me, especially if a matching monthly chart sell signal is soon triggered in the Dow Jones Transportation Average (which looks like a near certainty to me).
Of course, the most powerful card in the bearish camp's hand right now is the chart of the Russell 2000 Index (please see chart below). This closely watched barometer of small cap stocks is now down 5.92% from its all-time record high of 1213.55 as set on July 1, 2014. And an exceptionally strong preliminary monthly chart sell signal has already been triggered by my computer trading system here, the first monthly chart sell signal in the Russell 2000 Index since July 2007, the exact high of the great 5-year bull market from 2002 through 2007. After the July 2007 monthly chart sell signal, the Russell 2000 Index plunged 60% over the next 20 months!
Bottom Line: The southbound train has left the station!
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| Dow Jones Transportation Average Monthly Chart with Computer-generated Buy & Sell Signals |
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| UPS Monthly Chart with Computer-generated Buy & Sell Signals |
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| Russell 2000 Index Monthly Chart with Computer-generated Buy & Sell Signals |
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