We're 'very, very close' to a bottom in the transports, trader says — here are the levels to watch

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The iShares Transportation Average ETF is having its worst month ever as the coronavirus outbreak weighs on travel and transportation companies, and traders are on the lookout for a bottom in the group.

, along with many other indices, have broken the longer-term uptrends that have been intact since the bear market initially bottomed back on March 6th of 2009, so, this is an important development," Mark Newton, founder and president of Newton Advisors, told CNBC's"It means that the next one to two years likely [are] going to see further losses for many of these, I just don't think it's going to happen in a straight line," he said.

"It'll take a little bit more, I believe, before we're in the clear, but I do think that we're very, very close," Newton said. "We are very oversold, people are clearly fearful, and, historically, that's been a good time. So, the best advice I can say is to consider buying small and simply add a little bit on pullbacks, and I think we are on the verge of a time when we can at least have a decent bounce off these lows.

"We expect transports, as a cyclical sector tied to economic growth, are going to really reflect that severe weakness in the short run. But you're right: This shouldn't last forever," Chiavarone, a vice president, portfolio manager and equity strategist at his firm, said in the same "Trading Nation" interview.

His firm's "best thinking" was that the number of coronavirus infections could peak sometime during the second quarter, and that the back half of the quarter could start to see some relief in markets.

 

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As Dow wipes out over 3 years of stock-market gains, here’s a warning about calling the bottomSome investors might feel a strong temptation once the market finally shows some stability to declare that the lows are in. But some Wall Street veterans... Subtlety uninformative Microsoft had over 700% increase in On Demand Services & Teams just last week from work from home demand. Amazon can’t keep up w demand.Families can’t get laptops for home schooling bc sold out. Calling the bottom (or any sort of market timing prediction) is no better than gambling. Timing the market isn't a winning strategy.
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