Leading up to the impending stock market crash, by February 1929, one million Ford Model A’s were sold and by July, two million.
The original toolkit from the Model A looks practically medieval.
Given the October 1929 stock market crash, I suspect many Model A buyers used some of those tools on themselves in a medieval fashion.
Last night, we focused on the Transportation sector or the ETF IYT.
As of Monday, IYT’s price moved above the monthly chart’s channel line resistance.
That makes Monday’s low price 172.85 important, especially on a closing basis for this week.
Henry Ford focused on “design for manufacturability”.
The purpose of DFM is to address potential problems during the design phase thereby reducing manufacturing costs.
Today’s action had elements of archaic tool parts, elements of potential problems in the design phase and elements of welcomed reduction in costs.
As Transportation is my “go-to” this week, it outperformed the overall market and held the critical channel line.
Under the hood, however, the market might be using tools from 1929.
If so, what would make the bull market suddenly look medieval?
The Russell 2000 had a rough day. If the monthly channel line resistance at 142.90 disappears from view, we will know soon enough if that was the top.
There are several more modern tools to use to identify a top without having to sell the top tick.
For instance, besides monthly channels top and bottoms, I use phases. The daily phase and the weekly phase are fabulous tools for trading on the right side of the trend.
Currently, IWM may have failed the monthly channel chart. Notable is that it went into an unconfirmed warning phase on the daily chart. It is in a bullish phase on the weekly charts.
I like to consider the slope on moving averages. Although the S&P 500 went into an unconfirmed warning phase today as well, the 50 DMA slope remains positive.
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