Member @sau987 had asked for an update on the shipping sector & as I had recently pointed out the fact that many of the shippers looked to be setting up in bullish chart formations, I’ve since become somewhat lukewarm to the shipping sector for the following reasons. Since that previous video with some of my favorite setups was posted here on Sept 8th, the very next day the broad market triggered the long-awaited sell signals that I was looking with QQQ impulsive taking out the 116.00 support level & SPY impulsively slicing through the key 215.30 support level. While QQQ has since snapped back up within the recent trading range (a la the soon-to-be-faded AAPL rally), the more diversified SPY/S&P 500 has not & has been holding on for dear life to the 212.68 support level after a couple of failed attempts to regain & hold back above 215.30.

Until & unless the broad market, namely the S&P 500, can move back into & above the recent 2 month sideways trading range, the near-term & quite likely intermediate-term outlook for the US equity market is bearish. As such, the shippers (being a component of the transportation sector) would likely face significant headwinds going forward, should the broad market move lower. Should the markets hold up & rally to new highs, then the potentially bullish trade setups on many of the shipping stocks highlighted in the video below (the same ones that were covered in the Sept 8th video) have a good chance of panning out.

The other reason that I’ve since gone lukewarm on the shippers is that several of the stocks that were covered in that video have recently broken out above well-defined chart patterns or key resistance levels yet very few, if any, we confirmed by above average volume and/or failed to follow-through on those recent breakouts. My preference when trading the shipping sector is to do so when the bulk of the shipping stocks are moving higher on a noticeable expansion in volume following bullish breakouts above key technical levels. I plan to continue to monitor the shipping sector along with the broad markets closely in the coming weeks & should the charts of both confirm, I will likely add some of these trade setups as official trade ideas.

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