Symbolism of the Transports

The price action in the transportation sector today is symbolic of the way in which this market has operated for a while now. Just when it appeared that bears had a chance to really inflict some damage, with the transportation sector average, below on the daily timeframe, rejected off its broken support trend (lower light blue line) yesterday, this morning the transports are surging back above it.

Beyond that, the continued musical chairs theme of sector rotation is playing out, with the rails, airlines, and air couriers clearly outperforming the rest of the tape this morning. To be sure, major airlines like AAL DAL UAL were very oversold and for some type of bounce. 

But as long as those types of scenarios continue to play out, we could be in for more pre-Memorial Day drift in lieu of a directional move.  

Elsewhere, HD is giving a ho-hum reaction earnings, with peer LOW reporting tomorrow. HD remains very steep long-term but has yet to flinch, another prevailing theme of this market in terms of some of its multi-year winners not fully cracking, despite recent weakness in DIS NKE SBUX UA. 

Looking beyond Memorial Day, the above issues point towards continued bull resilience which, again, are going to need to change if bears are going to make meaningful headway below.