Near Term

Above is a chart of the transport average. They say, this is usually the leader of the market. This chart has some major resistance around the 5281 area, just another 1% ahead.
The $TRAN had an inverse head n shoulders breakout and we used it correctly to predict the reversal picture in july.
http://maybeitsclarke.blogspot.com/2008/07/pivotal-position-to-go-long-or-short.html

And here we are now, bumping against that same ascending trendline. Usually, when charts break out of such steep trendlines, they rarely get back into them. We expect the $TRAN to bounce off this trendline too, the bearish divergences are also beginning to appear.

But there is good news if you are a bull - since, this trendline is ascending, the resistance on this channel keeps increasing continuously at the rate of ~200 points per month So until we see signs of a top being put in, we are long this market, though not aggressively since the divergences are beginning to show. Every new resistance area, we take off some more profits from the table. Also, from the previous posts on the dollar and USO, they both are near year long trending resistance and support lines respectively. We don't think these will break on the first hit, at least for the USO.

Good luck to you all.