Tear Down the Jets, Tear Down the JETS

It sure feels like this is the one trading session in recent memory where we did not see an overnight/morning headline bonanza of Sam Altman/OpenAI/NVDA/Scott Bessent/Trump pumping up markets. Of course, we are now seeing a nice selloff today led by PLTR's earnings dump. Furthermore, there is a sense of complacency by many that since we are now in November that markets simply cannot selloff into the holidays--You might want to read up on 1973/74 and 2018 for some notable exceptions. 

In addition, I am flabbergasted that the airlines have held up as long as they have. On the JETS sector ETF daily chart, below, you can see a multi-month topping pattern in play with notable weakness today taking price down to levels not seen since early-August. Clearly, the historic length of the government shutdown is adversely affecting airlines, particularly with Thanksgiving coming up. 

But even before the shutdown we heard earnings calls like Delta's (DAL) where they noted the bifurcation between luxury cabin customers thriving while main cabin customers were struggling mightily. Eventually, that sort of spread narrows, typically in a bearish manner. I view all of the airline stocks as shorts. 

Much like the New York Jets today tearing down their roster for a rebuild at the NFL trading deadline, it is time for the airline space to undergo a rebuild as well as their stocks have been pricing in too rosy of a future relative to reality--The "reopening trade" from the post-pandemic world is deep in the rear view mirror now, with "travel" being a personality trait adopted by many Americans. However, as the economy tightens with stagflationary forces, coupled with the increased inefficiencies and inconveniences in most airports and airless these days, I am looking for a sharp drop-off in airline revenues and profits.