AIRLINES AND REITS TUMBLE
DELTA SLASHES FARES... Delta's announcement of a 50% rate cut in domestic airline fares is killing the airlines today. The Airline Index (XAL) is tumbling 7% today as the entire group is being sold heavily. Chart 1 shows the Airline Index crashing through its 50-day moving average and reaching a two-month low. Delta is falling on rising volume. Heavy-volume selling is even more evident on the daily charts of AMR, Northwest, and Continental. It may be a better time to fly, but not to buy.
Chart 1
Chart 2
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Chart 5
REITS ARE FALLING HARD ... Next to the airlines, REITs are the day's second weakest group. The Morgan Stanley REIT Index is falling 4% and is breaking its 50-day moving average for the first time in months. Its relative strength line has also started to drop (Chart 6). The day's weakest ETF is shown in Chart 7. The ICF is also breaking its 50-day line, and on heavy volume. Here's another 2004 leader that's being sold in the new year. MORE LATER.
Chart 6
Chart 7
