The 1934 film “Death Takes a Holiday,” explores why people fear it so much.

While “Death” takes on a human form so he can unidentifiably comingle, he falls in love with a human.

In the end, he must either sate his love and let her die or sacrifice his happiness and let her live.

Last week, a similar drama played out in the Transportation Sector.

After struggling since March to get over the resistance at 170, last week, on a quiet ½ day ahead of the July 4th holiday, IYT gapped higher.

That gap caught my attention since the sector looked like death back in May. The resurrection above key resistance on the monthly chart, made me well, fall in love.

Last Thursday night I wrote, “That makes Monday’s low price 172.85 important, especially on a closing basis for this week.”

IYT did better than that. It squashed the fears of investors and closed on new all-time highs.

If the death of transportation took a holiday, does that mean it will sate or sacrifice its love for the rest of the market?

The Russell 2000, after a rough week, about to confirm a Warning Phase, turned around on Friday. IWM’s respect for IYT drove it back above 140 and back into an unconfirmed Bullish Phase.

Since I defer to the Modern Family, I found the action in Regional Banks (KRE) and Biotechnology (IBB) holding onto their bullish phases, constructive.

Even though Retail (XRT) got crushed this year, the market has clearly divorced itself from brick and mortar weakness.

At least for now. With unemployment at 4.4%, huge layoffs in retail have yet to impact the overall economic picture.

So why do I hold Transportation in such high regard?

Way way back in the beginning of 2016, when Brexit dominated the headlines, IYT fell to 115 on January 20th.

Although IYT consolidated and began to run up from there, the Russell 2000 continued to fall. It made new lows and finally reversed on February 11th.

After I saw IYT bottom, I tweeted to folks that it was time to look for a buy opportunity on the basis of IYT’s relative strength.

Bears got burned at the lows.

Going back further in time, on December 9th, IYT tried but could not clear back over the 200 day moving average. In synch with IWM, it gave us double the confidence to liquidate longs.

Sounds simple right? Not really as at the same time IYT and IWM said careful, Nasdaq traded in a Bullish Phase.

Bulls got burned at the highs.

More than 115 years ago, Charles Dow created the oldest stock market indicator-the Dow Theory.

“As the theory goes: If the economy were truly humming, railroads and shipping companies that are needed to move goods across the country would be just as busy as the manufacturers of those products.” Time.com/money by Paul J. Lim 07-05-17.

At the end of “Death Takes a Holiday,” Death’s love interest knows his identity. Nevertheless, she joyfully departs with him to her own death.

With IYT at new highs, I am encouraged that the rally is not over. I’m even more encouraged that the drama I seek before I call a top has yet to play out.

Hence, the drama for the Bulls I seek. Like the Bulls that got burned at the December 2015 highs, they may wind up defiantly in love.

S&P 500 (SPY) 244-245 resistance to clear. 242 pivotal Under 240 not so good

Russell 2000 (IWM) I’d still consider the channel resistance at 142.90 as the number to watch. 140 pivotal. 137.50 support

Dow (DIA) 214.25 pivotal. 212 support.

Nasdaq (QQQ) 140 resistance. 137 pivotal and 135 support

KRE (Regional Banks) Must hold 54.75 clear 56.00 once and for all

SMH (Semiconductors) 83.50 pivotal resistance. 80.75 support.

IYT (Transportation) My go to last week and winner! Closed on new all-time highs. Unless it has a vicious fall below 172.50, patience prevails for bulls

IBB (Biotechnology) Trying to hold 310 area

XRT (Retail) 40.00 resistance 38.83 next support

GLD (Gold Trust) With new multimonth lows, I now wait for a good reversal signal.

USO (US Oil Fund) 9.00 the ultimate support held

TAN (Solar Energy) Must close above 20.00 to keep going.

TLT (iShares 20+ Year Treasuries) 124-125 resistance. 122.25 support

VXX (Volatility Index) No drama no fear

UUP (Dollar Bull) 24.95 pivotal resistance