Trade of the Day: iShares Transportation Average ETF (IYT)

IYT calls are a buy

By John Lansing

Amid fears of U.S. involvement in Syria, some of the major index ETFs have done a little back-testing, and though we still have lots of gaps, many of the major averages look to advance without a complete back-fill.

One way to take advantage of this is with the iShares Transportation Average ETF (IYT). If you’re familiar with Dow Theory, you’ll know that this index can be used as an indicator for the overall market–the idea being that the stocks used to transport goods can sometimes forecast the trend for goods-producing companies.  Right now, IYT and the Dow Jones Industrial Average are both trading in nearly identical upside patterns–with IYT making a move and the Dow following right after.

Recommendation: Buy a small position in the IYT October 19  $115 calls with a limit order at current levels.

InvestorPlace advisor John Lansing tracks the charts all day and offers expert technical analysis in his day trading, options and trading services: Power Trading at the OpenParabolic Options and Trending123.  Trending123 members receive access to the Trending123 Pattern Scan powered by Recognia free as part of their membership.

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