Circus Acts and Sectors

This morning's tape has the look and feel for a circus performer negotiating a complex juggling act, with tech leading and feeding off the AMD for XLNX deal (and MSFT earnings tonight), while small caps and some Dow names lag. Even with Congress adjourned until after the election, there remains dimming hopes for a stimulus deal. However, the market is fighting to stay relatively afloat despite that obvious headwind continuing to stare it in the face. 

As we discussed in a video yesterday, the transports are lagging and are red again this morning. The long-term picture is significant. But for our purposes today we want to stay balanced with ideas. 

On the short side, major airline UAL, first daily chart, below, looks like an actionable short to play for a multi-quarter breakdown on the back of delayed stimulus and a new round of virus cases. The impact towards Thanksgiving travel next month is likely to especially hit the airline hard. 

On the long side, XPO, another transport, continues to be a buyout target in logistics. The chart is hanging tough and above $96-$98 it is hard not to like the name long if transports muster a bounce.