Which Sector Shows Market Momentum Into Fall?

For some time now the Simpler team has talked about searching for tickers that aren’t getting caught up in all the volatility, but are showing signs of breaking out despite the market.

So what’s piquing our interest?

There is a sector within the market that never stops running and regularly appears as the canary in the coal mine for possible momentum shifts.

Transports.

These tickers, which include airlines, shipping, and trucking, fall within the Dow and are showing signs of gaining strength in an uptrend.

When looking for our next round of trades, we’re watching the overall sentiment of the market – coupled with events that could upset the trends or correct them related to these tickers.

Events could fall along the lines of expected Fed meetings and plans or unexpected situations such as pandemics or world economic issues.

Our focus for transports comes from having an established stock watchlist. Transports may be a sector within the overall market, but this arena has individual stocks that define the sector.

A watchlist helps follow this insight: which stock you trade is more important than how you trade that ticker.

What helps is to have a well-formed bullish, bearish, and “do not watch” list that provides an edge in trading, even more so than strategy.

Even the best strategy won’t overcome a bad ticker picker.

Most negative events are “baked into” the market and are expected to cause pullbacks or even a strong “recalibrating” in a sector or the overall market.

This summer is closing fast after being in a bit of limbo, yet mostly staying bullish. Our canary in the coal mine – our watchlist – is signaling bullish market sentiment ahead. We’ll keep watching to see if this market cools heading into the fall trading season or sets up for a heated end-of-year run.

We Saw: Abrupt dose of “flat” to close the month –

• All three major indexes finished today just in the red
• Online meeting stocks slowing with more workers heading to the office
• Consumers not confident heading into fall retail season

We’re Watching: For next opportunities heading into fall trading season –

• How high home prices will go and if this will lead to a tumble
• Starting September – historically a rough month – with caution
• Fed’s true view of inflation may be more worrisome than expected