Take a good look at the photo.
You will see a really long line that extends well out-of-sight.
We stood on that line from 1 AM until 5 AM along with the rest of the crowd. Maybe it was the hour, but everyone was really chill considering.
Why were we on the line?
Because the airline canceled all their flights so folks had to rebook.
The airline employed 2 agents to rebook about 1000 people.
Why am I telling you this story?
Because it eerily resembles the market.
The Transportation sector via IYT is breaking down. And bulls seem to be very chill about it.
Back on September 17, IYT made a confirmed reversal top.
Indeed, I reported it to you right away.
The measured move on that reversal using a 5-10% correction, puts the target around 180-190.
We believe that IYT under 202 is trouble enough.
Today, IYT broke 200.
What does that mean for the bulls?
Should IYT fail to close above 200.20 by Friday, it will be the first failure of the 17-week exponential moving average.
Then, the 50-WMA comes in lower at 192.80.
With Semiconductors (SMH) and Regional Banks (KRE) already below their 50-WMAs, bulls can hope that IYT recovers before it sees its 50-WMA.
Otherwise, the long line of quiet bulls waiting for rebooking, will begin to get very restless.
Especially if there are only 2 buyers trying to hold the market up.
S&P 500 (SPY) Closed just under 287.70 the very pivotal 50 DMA, which puts this in an unconfirmed warning phase
Russell 2000 (IWM) 159.42 is the 50-WMA-if breaks, expect to see weakness and fear. What will save this? It starts with a move back over 164.
Dow (DIA) 259.50 is the underlying 50-DMA support.
Nasdaq (QQQ) Looking more like a double top unless it can clear and close over the 50 DMA or around 182.30
KRE (Regional Banks) Inside day. Lots of bank earnings this week-watch 61 for resistance and it must hold 58.28
SMH (Semiconductors) Inside day above 100. If that breaks, I think much lower. If can get over 102.23, a bit better
IYT (Transportation) See commentary
IBB (Biotechnology) 115 pivotal support, then 112. 118 now resistance
XRT (Retail) 47.75 the 200 DMA