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The transportation index is one of the most important sectors in the stock market. Many traders and investors will follow the transportation index very closely for clues to whether the economy is growing or contracting. Remember everything that we buy has

The transportation index is one of the most important sectors in the stock market. Many traders and investors will follow the transportation index very closely for clues to whether the economy is growing or contracting. Remember everything that we buy has to be transported from somewhere to someone before being sold. The transports are also watched by many traders and investors that use Dow Theory and other cyclical trading methods. In early July this index never confirmed a new low for the year while the Dow Jones Industrial Average did. However, this non-confirmation move in the transportation index was painting a different picture and the market indexes rallied throughout the first half of July. Today the transports are declining again continuing it's sell off from last Friday when the index dropped over 137.00 points. Today the negative commercial airline sector is weighing on the transportation index.

The major commercial airlines are all declining sharply after a poor market reaction to Delta Airlines Inc (NYSE:DAL) quarterly earnings announcement. Delta Airlines is trading lower today by 1.14 to $10.57. Please remember since this company merged with Northwest Airlines it has now become the largest airline in the world. Therefore, this stock carries a lot of weight in this sector. Delta Airlines Inc will have some daily chart support around the $10.50 level.

UAL Corp (NASDAQ:UAUA) is trading lower by 1.68 to $19.66. This is another sharp move lower on the airline sector. UAL Corp will have daily chart support around the $18.80 - $18.50 area in the near term. Should that level fail to hold as support then the $17.00 level will be the next important support area.

AMR Corp (NYSE:AMR) is trading lower today by 0.29 to $6.57. AMR Corp has been beaten up since June 16th when the stock traded as high as $8.88. AMR Corp will have some daily chart support around the $6.25 - $6.00 levels.

Today the transportation index is under pressure. The Ishares Dow Jones Transportation Index (NYSE:IYT) is lower today by 0.94 to $73.51. The weak commercial airline sector is primarily the cause of the decline in the transportation sector. Please remember when this sector declines it is a sign of market weakness and consumer contraction.






Disclosure: DAl, AMR