The Summer Dance of Bear Hope

While the momentum blow-ups this earnings season in LNKD TWTR YELP, and now QLYS, may be enough ammunition for hopeful bears to declare a correction imminent, this particular bull market has been resilient enough to previously shrug off those types of moves in the past.

But when it comes to a heavyweight market cap sector such as the transports, the long-running bearish divergence since just after Thanksgiving 2014 may be the better song for bears to dance to this summer. 

On the Dow Jones Transportation Average, below, note only do we have the non-confirmation of the new all-time highs made by the industrials, but now the transports may be headed for fresh lows their 200-day moving average. 

Specifically, if the 8,600 is lost (roughly $153.30 on the IYT ETF) I suspect the bear case strengthens for a further slide. 

And this time the major averages would be hard-pressed to ignore a fresh leg down below the 200-day moving average for such a major part of the market and economy as the transports.