Morning selling gave way to buyers anticipating good news from the Federal Reserve Bank’s meeting minutes. After the release of the minutes the market went nuts with traders pushing the stock market higher. Unfortunately, the gains had after the buying spree could not be held. Late day selling took the wind out of the bulls’ sail. A big negative on the session was transportation stocks as the group fell more than 2% on the session. The index has made a new low for the year. NASDAQ exchange volume was higher on the session while NYSE volume fell on the day. Other than Transportation stocks financials were lower on the session, but did not suffer the same fate.  A black mark is certainly the transportation index, but for now the indexes remain in their uptrend.

Weighing on the transportation index were Airlines. Airlines as a group fell more than 8% within the S&P 500. AAL, LUV, and DAL all components within the S&P 500 transportation industry suffered tremendous losses. The Dow Transportation index is in a clear downtrend making a new lower low today. Former higher flyer like SAVE hit new yearly lows today. There is certainly something going on with Airlines and while we can speculate what it may be it simply does not matter. What is important is price and the trend for many of these airlines is clearly down.  Just look at the TRAN about to death cross:

2015-05-20_TRAN_Daily

On the bright side of things a stock we highlighted yesterday was BABA. The stock was able to break about the $90 for the first time since early February. Volume ended the day higher than yesterday and above its 50 day volume average. A very good sign the stock found support as it broke out. BABA proving this was not just a bad day for Transportation stocks.

Trending on social media is certainly airline stocks like we mentioned above. Typically a divergence between transportation stocks and Industrials is never a good thing. Will it guarantee the end of this market rally? No, there are no guarantees. But, if you have a robust trading plan and risk management system you are all set.  However, if you do not and are worried about what may happen next you need to register so we can help. If you are trading by the seat of your pants without a plan we can help. Use coupon code SELLINMAY and get 30% off. Come join us with a platinum subscription and let our chat room assist in your development. Do not hesitate and get your subscription now!

Tomorrow we do get a slew of economic data.  Most of it will not matter.  Markit releases a ton of preliminary PMI data.  We get a read on weekly jobless claims, but none of these truly matter.  Price action always trumps everything else.  Cut your losses, ride your winners, and always have proper position sizing.