With 10 days til Christmas, the Santa rally has hung its ornamental lights with barbed wire.

Yesterday, we saw what happens when seagulls feel the slightest threat to their safety…they peck at each other and/or chaotically fly away.

Fight or flight equally describes the market as soon as it feels the slightest threat.

So, despite the festive glow this time of year-consumer confidence strong, jobless claims down, and the Federal Reserve stating stronger expectations for the economy, barbed wire suggests the underlying dangers.

Not everything was bound by barbed wire. Certain instruments well outperformed, while many other sectors got squeezed.

Will the nervous market seagulls regain composure and fly back to harmoniously settle on the shoreline?

Literally every day, the recent top performer of the Modern Family-Transportation (IYT), has broadcasted the day’s sentiment.

Early today, IYT made a new all-time high by a smidgeon. Then, it proceeded to back off from those highs, but gently.

Three issues back-to-back spooked the market gulls.

First, the news that net neutrality was overturned. Secondly, the announcement that Paul Ryan might retire as Speaker of the House.

And finally-the denouement-Marco Rubio might vote no on tax reform.

Transportation fell from its new highs down to test the underlying fast-moving average.

Last night I mentioned 186.35 as the point for IYT to hold. Today’s low, 186.17.

Nevertheless, the gulls seemed to realize that today’s barbed wires dull in comparison to potential tsunami issues (like a war for example).

Hence, the market came back to calm and IYT, although red on the day, held critical support.

By the end of the session, certain lights flickered brightly-mainly FANG stocks.

Others tightly hugged the tree to avoid getting stabbed by sharp barbs.

S&P 500 (SPY) 265 pivotal.

Russell 2000 (IWM) 149.60 the 50-DMA 152 pivotal and through 153 better