Stock Market Dilemma: Transports and Small Caps May Have Topped

Two extremely important sectors to the economy and U.S. equities market are struggling.

And investors should take notice.

The Transportation Sector ETF (IYT) small cap Russell 2000 (IWM) are two sectors bulls would like to see continuing higher. But today’s long-term “monthly” charts give reason for pause… and perhaps a warning to equity investors.

As you can see in today’s 2-pack, the RSI (Relative Strength Indicator) is producing lower highs for both Transports (IYT) and small caps (IWM) at each point (1). And this comes while both IYT and IWM could be double topping at each point (2).

Sign up for our FREE newsletter
and receive our best trading ideas and research

More worrisome, however, are the monthly candles. November produced an out-sized bearish reversal candle for each. This will create a lot of overhead supply and could stunt rally/bounce attempts.

I humbly think investors need to be aware of how these patterns play out… especially considering the economic importance of small cap and transportation companies. What happens next could effect your portfolio. Stay tuned!

Transportation Sector (IYT) & Russell 2000 (IWM) Charts

small cap stocks transportation sector topping market bearish chart december

Note that KimbleCharting is offering a 2 week Free trial to See It Market readers. Just send me an email to for details to get set up.

Twitter:  @KimbleCharting

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.